CYCLIQ GROUP LTD - Annual Report 2013

Sprint Energy Limited ACN 119 749 647

Annual Report - 30 June 2013

Sprint Energy Limited Contents 30 June 2013

Contents
	Page
Corporate directory	3
Directors' report	4
Auditor's independence declaration	15
Financial report
Consolidated statement of profit or loss and other comprehensive income	16
Consolidated statement of financial position	17
Consolidated statement of changes in equity	18
Consolidated statement of cash flows	19
Notes to the financial statements	20
Directors' declaration	52
Independent auditor's report to the members of Sprint Energy Limited	53
Shareholder information	56
Corporate Governance Statement	59

Sprint Energy Limited Corporate directory 30 June 2013

Directors	Steve Flynn (Non-Executive Director)
	Jonathan Knapp (Non-Executive Director)
	Andrew Chapman (Non-Executive Director)
Company secretary	Piers Lewis
Registered office	Level 1,981 Wellington Street
	West Perth WA 6005
	Ph : (08) 6555 2950
	Fax : (08) 9321 3102
Principal place of business	Level 1,981 Wellington Street
	West Perth WA 6005
	Ph : (08) 6555 2950
	Fax : (08) 9321 3102
Share register	Computershare Investor Services Pty Ltd
	Level 2 Reserve Bank Building
	45 St George Terrace Bank Building
	Perth WA 6000
	Tel : (08) 9323 2000
	Fax : (08) 9323 2033
Auditor	Nexia Perth Audit Services Pty Ltd
	Level 3, 88 William Street
	Perth WA 6000
	Tel (08) 9463 2463
	Fax (08) 9463 2499
Stock exchange listing	Sprint Energy Limited shares are listed on the Australian Securities Exchange (ASX
	code: SPS)
	(ASX code options: SPSOA)
Website address	www.sprintenergy.com.au

Sprint Energy Limited Directors' report 30 June 2013

The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Sprint Energy Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled for the year ended 30 June 2013.

Directors

The following persons were directors of Sprint Energy Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Dr Jaap Poll – appointed 6 January 2012, resigned 31 July 2013 Brad Boyle – appointed 12 April 2012, resigned 14 December 2012 James Thompson - appointed 30 July 2012, resigned 22 August 2013 Craig Martin - resigned 9 August 2012 Jon Roestenburg – appointed 3 October 2012, resigned 15 February 2013 Ken Chad - appointed 18 February 2013, resigned 27 September 2013 Andrew Chapman – appointed 8 October 2012 Steve Flynn - appointed 22 August 2013 Jon Knapp - appointed 22 August 2013

Principal activities

During the financial year the principal activities of the consolidated entity were the management of onshore and offshore oil and gas production in the USA and the management of exploration and evaluation activities in Russia.

During the year, the activities in the USA were discontinued.

Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $10,848,342 (30 June 2012: $220,609).

Highlights

Post balance date Sprint appointed 2 highly qualified International Directors to secure and fund additional projects
An AUD11 million funding LOI signed with Hanhong for drilling at the Tomsk Project
USD1.1 million raised via a convertible debt instrument to accelerate re-entry at Block 71-1 of the Tomsk Project
Strategic investor committed to a USD0.75 million convertible note and agreed indicative terms on a USD10 million loan for a development well at the Tomsk Project

Sprint Energy Ltd (“Sprint” or the “Company”) (ASX Code: SPS) is pleased to provide the following update on its activities for the year.

LOI signed with Hanhong

Sprint advised that a non-binding Letter of Intent ("LOI") had been executed with Hanhong to start an investment process for capital funding of the Tomsk Project. This LOI has been signed with Hanhong (Hong Kong) Limited, part of an international private equity group with approximately USD1 billion under management.

The funding will be exclusively for the drilling of an additional well (Well #6) on a newly-identified structure updip of Well #4 in Block 71-1 (please refer to our ASX release of 20 March 2013). Providing the funding for this well shall further satisfy the current obligations to the Russian partner and operator, OOO Bakcharneftegaz (“BNG”).

About Hanhong

Hanhong are highly respected international investors within the natural resource and financial services sector and control approximately USD1 billion under management globally. Consisting of highly specialized, sophisticated and dedicated professionals with international backgrounds, Hanhong’s offices are in China, Hong Kong and Singapore.

Strategic Investor funding and loan

An international oil and gas production company (“the Investor”) has agreed to take a strategic equity interest in the Company by way of an AUD750,000 convertible note and the offer of a USD10 million loan facility. Importantly, the funds received from the Investor, combined with the loan facility, will ensure Sprint is funded for both the re-entry and development wells on Sprint’s Tomsk project, license block 71-1 in the prolific oil and as region of Tomsk, Russia.

Sprint Energy Limited Directors' report 30 June 2013

Indicative terms have been received from the Investor for the loan and the Company is currently reviewing the loan terms in conjunction with the Hanhong LOI with the aim to negotiate the most favourable terms for the Company before the end of the next quarter.

Tomsk Project, Russia

Since signing the agreement to acquire 74% of BNG in December 2012 (ASX: announcement, 07/12/2012) preparations for the winter field operation on licence 71-1 in the prolific West Siberian Basin continued on schedule.

In the Tomsk region, BNG, Sprint’s partner and local operator, has continued preparing for the forthcoming re-entry of Well #4 on license block 71-1 and activity is anticipated in the coming quarter as weather permits.

As earlier described, the re-entry program has the option to either re-perforate or sidetrack the blowout intervals and any other zones of interest. However, the decision on which specific intervals to re-perforate or whether to sidetrack will depend on operational constraints at the time.

Well geophysical service (logging) contracts have been let and all relevant permits have been received by our local operator from the authorities, including the all-important forestry permit.

The Group is currently not in compliance with the payment schedule in the Share Purchase Agreement between the Vendor and the Group. The Group has been in discussions with the vendor to correct the breach of the payment schedule and as per the terms in the agreement with the vendor the Group are required to rectify the outstanding amount (US$600,000) within 23 days from signing this report, to resolve the issue.

Padre Island, USA

The Company continues to review its US operations. During the year, the Company completed a rationalisation of its cost base to reflect the current funding environment.

During the year the US operation via Modena Operating LLC was shut down and became a discontinued operation and as at balance date has a liability position of $2,679,797 as disclosed in Note 7. The directors received legal advice that outlined that the subsidiary Modena Operating LLC’s liabilities do not have recourse to the parent and as such are not due and payable by the parent Sprint Energy Limited; this significantly reduces the negative working capital position at balance date from $3,493,714 to $813,917. However should there be any requirement for the parent entity to fund any liabilities of the US subsidy then these costs would be supported by a letter from a major shareholder as outlined below.

Penza Project, Russia

During the financial year the board decided to not proceed with its option over the Penza project.

Corporate

The Company has cash reserves of approximately $86,000 as at 30 June 2013 and a letter of support from its major shareholder. As discussed above, competing funding options are being reviewed by the Company to fund the development well at license block 71-1 on the Company’s Tomsk project, Russia. The Company is also reviewing other Oil & Gas projects in the interim.

The directors have received a financial letter of support from one major shareholder dated 15 March 2013, whereby the shareholder will provide funding to the Company to enable it to meet its debts as and when they fall due from the date the letter was signed to 15 March 2014, further to this the directors received a further letter of support from this shareholder dated 27 September 2013 that outlines the shareholder will provide funding to meet any potential liabilities of the discontinued US operation that is required to be made by the Company from the date of the letter for the next 6 months. The directors received a second letter of support from another major shareholder dated 30 September 2013 whereby the shareholder will fund the head entities working capital requirements of the Company from the date of the letter for the next 12 months.

Significant changes in the state of affairs

During the year the Company issued:

24,910,114 shares on 13 August 2012 following the conversion of convertible notes, as approved by shareholders at the Company’s August 2012 General Meeting.

1,649,307 shares on the 24 August 2012 to raise $26,364 before costs.

76,880,000 shares on the 19 September 2012 to raise $1,537,600 before costs.

100 shares on the 20 November 2012 to raise $2 before costs.

Sprint Energy Limited Directors' report

30 June 2013

146,716,767 shares on the 7 December 2012 as consideration to the Tomsk project vendors, and 11,019,108 shares following the conversion of convertible notes, as approved by shareholders at the Company’s 2012 Annual General Meeting.

In December 2012, the Company signed an agreement to acquire 74% interest in OOO Bakcharneftegaz (“BNG”) the holder of Licence Block 71-1 project in Tomsk, Western Siberia, Russia.

The work on the development of a new exploration well on Block 71-1 is yet to be commenced. The Company is currently in talks with several parties on the funding of the Tomsk project. An international oil and gas production company (“the Investor”) has agreed to take a strategic equity interest in the Company by way of an AUD750,000 convertible note and the offer of a USD10 million loan facility. Importantly, the funds received from the Investor, combined with the loan facility, will ensure Sprint is funded for both the re-entry and development wells on Sprint’s Tomsk project, license block 71-1 in the prolific oil and as region of Tomsk, Russia

During the year the US operation via Modena Operating LLC was shut down and became a discontinued operation (Refer note 7 of the accounts)

There were no other significant changes in the state of affairs of the Group during the financial year.

Matters subsequent to the end of the financial year

Apart from the matters raised below, no matters or circumstance has arisen since 30 June 2013 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years:

The vendor for the Tomsk project has notified the board of Sprint Energy Limited that the Group is currently not in compliance with the payment schedule in the Share Purchase Agreement between the Vendor and the Group. The Group has been in discussions with the vendor to correct the breach of the payment schedule and as per the terms in the agreement with the vendor the Group are required to rectify the outstanding amount (US$600,000) within 23 days from signing this report, to resolve the issue.

Sprint Energy Limited Directors’ report 30 June 2013

Future developments, prospects and business strategies

The near term focus for the Company is on securing additional projects and ongoing funding commitments as Sprint moves forward toward its next phase to becoming an International Oil & Gas company.

Determining and optimising funding options whether using debt or equity finance for the Company’s activities will continue to be a priority for the management of the Company. In particular, the development of the exploration of the Company’s exploration projects, along with general working capital will require funding arrangements in the coming years. The management continues to review opportunities to fund the Company’s assets.

Exploration Risk

Oil and Gas exploration and development are high-risk undertakings, and there is no assurance that exploration of the Tenements will result in the discovery of an economic deposit. Even if an apparently viable deposit is identified there is no guarantee that it can be economically exploited.

The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on activities due to permitting requirements, availability of appropriate exploration equipment, exploration costs, seasonal weather patterns, unanticipated operational and technical difficulties, industrial and environmental accidents and many other factors beyond the control of the Company.

Environmental regulation

During the financial year Modena Operating LLC (“Modena”) a subsidiary of Sprint received a notice from the US Authorities that Modena was required to rehabilitate the ground of its projects. The US Authorities informed Sprint that its bond was utilised towards this rehabilitation work. Apart from the above, there have been no recorded incidents of non-compliance with any applicable international, national or local declarations, treaties, conventions or regulations associated with environmental issues during the reporting period. There have not been any known significant breaches of any environmental regulations during the year under review and up until the date of this report. The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires entities to report annual greenhouse gas emissions and energy use. The directors have assessed that there are no current reporting requirements.

Information on directors

Andrew Chapman

Name: Andrew Chapman Title: Non- Executive Director (appointed 8 October 2012) Qualifications: Bachelor of Business, Diploma of Financial Planning, Graduate Diploma of Finance & Investment Experience and expertise: Mr Chapman holds a Bachelor of Business and Economics with a Graduate Diploma of Applied Finance and Investment. Andrew is currently the Managing Director of Merchant Funds Management Pty Ltd and the Portfolio Manager of the Merchant Opportunities Fund which holds a relevant interest of 7.5% (49,225,624) in Sprint Energy Ltd.

Other current directorships: Nil Former directorships (in the last 3 years): Nil Special responsibilities: Nil Interests in shares: 60,541,408 Interests in options: Nil

Sprint Energy Limited Directors’ report 30 June 2013

Information on directors

Information on directors
Name:	Steven Robert Flynn
Title:	Non-Executive Director (appointed 22 August 2013)
Qualifications:	ACA
Experience and expertise:	Mr Flynn is a UK Chartered Accountant with extensive corporate experience. He has devoted
	his entire working career to the business of global corporate finance, having been employed
	by such household names as Ernst & Young and Fidelity and most recently as an Independent
	Consultant on business strategies, stock market listings and capital raising with a particular
	focus on Asia, Africa and India. Mr Flynn’s previous positions include Managing Director of
	Multiconsult and CEO of Cim Global Business Cluster.
	A British national, Mr Flynn currently resides in Mauritius.
Other current directorships:	Monterosa Asset Management
	Liquid Holdings Limited
	Arro Fund Plc.
	Melrose Asset Management
	Rivierenoir Consultants
	Capital Creation Partners
Former directorships (in the
last 3 years):	Nil
Special responsibilities:	Nil
Interests in shares:	Nil
Interests in options:	Nil
Name:	Jonathan Josef Knapp
Title:	Non-Executive Director (appointed 22 August 2013)
Qualifications:	Bachelor of Law
Experience and expertise:	Mr Knapp holds a bachelor of Laws degree (English & European) from the University of Essex,
	the United Kingdom, and is an accomplished banking industry executive with over 10 years’
	experience. A former director within Lehman Brothers and Nomura, he has worked within
	Europe, Asia, the Americas and Africa and speaks Japanese.
	A British national, Mr. Knapp currently resides in Mauritius.
Other current directorships:	Nil
Former directorships (in the
last 3 years):	Nomura Mauritius Limited
Special responsibilities:	Nil
Interests in shares:	Nil
Interests in options:	Nil

'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships in all other types of entities, unless otherwise stated.

'Former directorships (in the last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes directorships in all other types of entities, unless otherwise stated.

Company secretary

Piers Lewis – B Comm, CA (appointed 17 December 2012)

Piers Lewis joined the Company in December 2012. Mr Lewis is a Chartered Accountant with 15 years corporate experience, and has held executive and senior management positions throughout London and Australia. Mr Lewis also holds directorships, Company Secretary and CFO positions with other ASX-listed resource companies.

Melanie Leydin - B.Bus, CA (appointed 9 October 2011, resigned 17 December 2012)

Sprint Energy Limited Directors’ report 30 June 2013

Meetings of directors

The number of meetings of the company's Board of Directors and of each board committee held during the year ended 30 June 2013, and the number of meetings attended by each director were:

					Remuneration and Nomination
	Full Board		Audit Committee		Committee
	Attended	Held	Attended	Held	Attended	Held
Brad Boyle	4	4	-	-	-	-
Craig Martin	-	-	-	-	-	-
Dr Jaap Poll	12	12	-	-	-	-
James Thompson	12	12	-	-	-	-
Jon Roestenburg	6	6	-	-	-	-
Andrew Chapman	9	9	-	-	-	-
Ken Chad	4	4	-	-	-	-

Held: represents the number of meetings held during the time the director held office or was a member of the relevant committee.

Other than disclosed above, all other directors during the year ended 30 June 2013 did not attend any Board, Audit Committee, or Remuneration and Nomination Committee meetings.

Remuneration report (audited)

The remuneration report, which has been audited, outlines the director and executive remuneration arrangements for the consolidated entity and the company, in accordance with the requirements of the Corporations Act 2001 and its Regulations.

The remuneration report is set out under the following main headings: A Principles used to determine the nature and amount of remuneration

B Details of remuneration C Service agreements
D Share-based compensation

A Principles used to determine the nature and amount of remuneration

The objective of the consolidated entity's and company's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation of value for shareholders, and conforms with the market best practice for delivery of reward. 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
alignment of executive compensation
Transparency

The Remuneration and Nomination Committee is responsible for determining and reviewing remuneration arrangements for its directors and executives ('program participants'). 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.

Sprint Energy Limited Directors’ report 30 June 2013

Remuneration Report (Audited)

Alignment to shareholders' interests:

has economic profit as a core component of plan design
focuses on sustained growth in shareholder wealth, growth in share price, and delivering constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
attracts and retains high calibre executives

Alignment to program participants' interest

rewards capability and experience
reflects competitive reward for contribution to growth in shareholder wealth
provides a clear structure for earning rewards

In accordance with best practice corporate governance, the structure of non-executive directors and executive remunerations are separate.

Non-executive directors remuneration

Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors' fees and payments are reviewed annually by the Remuneration Committee.

ASX listing rules requires that the aggregate non-executive director’s remuneration shall be determined periodically by a general meeting. The most recent determination was at the Annual General Meeting held on 17 February 2012, where the shareholders approved an aggregate remuneration of $350,000.

Executive remuneration

The consolidated entity 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.

Sprint Energy Limited Directors’ report 30 June 2013

Remuneration Report (Audited

The executive remuneration and reward framework has four components:

base pay and non-monetary benefits
share-based payments
other remuneration such as superannuation and
long service leave

The combination of these comprises the executive's total remuneration.

Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the Remuneration Committee, based on individual and business unit performance, the overall performance of the consolidated entity and comparable market remunerations.

Executives can receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle benefits) where it does not create any additional costs to the consolidated entity and adds additional value to the executive.

The long-term incentives ('LTI') include long service leave and share-based payments. Options may be awarded to executives based on long-term incentive measures.

Consolidated entity performance and link to remuneration

The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. The achievement of this aim has been through the issue of options to directors and executives to encourage the alignment of personal and shareholder interests.

Non-Executive directors, other key management personnel and other senior employees have been granted options over ordinary shares. The recipients of options are responsible for growing the Company and increasing shareholder value. The options provide an incentive to the recipients to remain with the Company and to continue to work to enhance the Company's value.

B Details of remuneration

Amounts of remuneration

Details of the remuneration of the directors, other key management personnel (defined as those who have the authority and responsibility for planning, directing and controlling the major activities of the consolidated entity) and specified executives of Sprint Energy Limited are set out in the following tables.

Sprint Energy Limited Directors’ report 30 June 2013

							Post-
						employment			Long-term	Share-based
30 June 2013	Short-term benefits					benefits			benefits	payments
	Cash salary			Non-			Super-	Long service		Equity-
Name	and fees	Bonus		monetary		annuation			leave	settled	Total
	$		$		$		$		$	$	$
Non-Executive
Directors:
Dr J Poll	68,807			-	-		6,193		-	-	75,000
C Martin	14,787			-	-		1,331		-	-	16,118
J Roestenburg1	174,541										174,541
J Thompson	77,820			-	-			-	-	-	77,820
K Chad	21,852										21,852
A Chapman	43,710			-	-			-	-	-	43,710
Executive
Directors:
B Boyle	109,157			-	-		9,911		-	-	119,068
Other Key
Management
Personnel:
P Lewis	37,306			-	-			-	-	-	37,306
	547,980			-	-		17,435		-	-	565,415
1– J.Roestenburg received consultancy			fees for technical work performed					outside	his Non-Executive Director’s duties.
Other than noted above, all other		key management personnel				did not receive remuneration during the current financial year.
					Post-
					employment		Long-term		Share-based
30 June 2012	Short-term benefits				benefits		benefits		payments
	Cash salary			Non-	Super-		Long service		Equity-
Name	and fees	Bonus	monetary		annuation		leave		settled	Total
	$	$		$	$			$	$	$
Non-Executive
Directors:
D Jendry	15,000		-	-		-		-		-	15,000
C Damiano	28,950		-	-		-		-		-	28,950
Dr J Poll *	25,024		-	-		-		-		-	25,024
C Martin *	52,621		-	-		-		-		-	52,621
Executive
Directors:
C Edwards	59,863		-	-		2,764		-		-	62,627
B Boyle *	53,309		-	-		5,007		-		-	58,316
A Mattin	121,503		-	-	13,296			-	78,000		212,799
Other Key
Management
Personnel:
M Leydin	78,000		-	-		-		-		-	78,000
	434,270		-	-	21,067			-	78,000		533,337

Other than noted above key management personnel did not receive remuneration during the current financial year.

There was no proportion of remuneration that was performance related during the financial years. Sprint Energy Limited Directors’ report 30 June 2013

C Service agreements

The employment arrangements of the Directors and key management personnel are not formalised in contracts of employment.

D Share-based compensation

Issue of shares

There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2013.

Issue of Options

There were no options issued to directors and other key management personnel as part of compensation during the year ended 30 June 2013.

This concludes the remuneration report, which has been audited.

Shares under option

Unissued ordinary shares of Sprint Energy Limited under option at the date of this report are as follows:

		Exercise	Number
Grant date	Expiry date	price	under option
Various (listed)	31 December 2013	$0.30	74,011,252
25 February 2012 (unlisted)	31 March 2015	$0.06	55,000,000
25 February 2012 (unlisted)	31 March 2015	$0.04	5,000,000
			134,011,252

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 issued on the exercise of options

There were no shares of Sprint Energy Limited issued on the exercise of options during the year ended 30 June 2013 and up to the date of this report.

Indemnity and insurance of officers

The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.

Sprint Energy Limited Directors’ report 30 June 2013

Indemnity and insurance of 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.

Dividends

No dividends have been paid or declared since the end of the previous financial year to the date of this report.

Non-audit services

There were no non-audit services provided during the financial year by the auditor.

Officers of the company who are former audit partners of Nexia Perth Audit Services Pty Ltd

There are no officers of the company who are former audit partners of Nexia Perth Audit Services Pty Ltd.

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 on the following page.

Auditor

Nexia Perth Audit Services Pty Ltd 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

==> picture [50 x 69] intentionally omitted <==

______ Andrew Chapman Non-Executive Director

30 September 2013 Perth

==> picture [120 x 79] intentionally omitted <==

Auditor’s independence declaration under section 307C of the Corporations Act 2001

To the directors of Sprint Energy Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2013 there have been:

(i) no contraventions of the auditor’s independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

==> picture [91 x 39] intentionally omitted <==

Nexia Perth Audit Services Pty Ltd

==> picture [194 x 55] intentionally omitted <==

Amar Nathwani Director

30 September 2013 Perth

==> picture [159 x 85] intentionally omitted <==

Sprint Energy Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2013

Note Revenue from continuing operations 3 Other income 4 Expenses Administration, consulting and other expenses Exploration and evaluation expenditure 11 Employee benefits expenses Depreciation and amortisation expenses 5 Directors fees and benefits expenses Impairment of assets Finance costs 5 (Loss)/Profit before income tax expense Income tax expense 6 (Loss)/Profit from continuing operations Discontinued operation Loss from discontinued operation, net of tax 7 Loss after income tax expense for the year attributable to the owners of Sprint Energy Limited Other comprehensive loss Items that may be reclassified subsequently to profit or loss Foreign currency translation Reclassification of foreign currency reserve on discontinued operation Items that will not be reclassified to profit or loss Other comprehensive loss for the year, net of tax Total comprehensive loss for the year attributable to the owners of Sprint Energy Limited Basic/diluted loss per share from continuing operations 31 Basic/diluted loss per share from discontinued operation 31 The accompanying notes are an integral part of these financial statements.	Consolidated 30 June 2013 30 June 2012 $ $ 30,361 58,516 - 3,577,797 (1,039,755) (1,031,253) (5,042,887) (1,103,081) (14,969) (8,602) (4,615) (3,899) (372,250) (455,337) - (644,142) (78,032) (919,892)
	(6,522,147) 573,187 - -
	(6,522,147) 573,187
	(4,326,195) (793,797)
	(10,848,342) (220,609)
	(269,164) (218,765) 3,495,133 -
	- -
	3,225,969 (218,765)

	(7,622,373) (439,374)
	Cents Cents (0.91) (0.13) (0.52) (0.13)

Sprint Energy Limited Consolidated statement of financial position As at 30 June 2013

Note Assets Current assets Cash and cash equivalents 8 Cash and cash equivalents of discontinued operation 8 Trade and other receivables 9 Total current assets Non-current assets Property, plant and equipment 10 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 12 Borrowings 13 Employee benefits 14 Provisions 15 Share applications received in advance Discontinued operations liabilities 7 Total current liabilities Non-current liabilities Borrowings 13 Total non-current liabilities Total liabilities Net liabilities Equity Issued capital 16 Reserves 17 Accumulated losses Total deficiency in equity	Consolidated 30 June 2013 30 June 2012 $ $ 79,636 276,644 6,720 - 81,662 384,551 168,018 661,195 12,687 102,342 12,687 102,342 180,705 763,537 644,949 1,250,388 226,585 293,400 - 4,662 - 2,001,065 110,400 - 2,679,797 - 3,661,732 3,549,515 1,911,042 - 1,911,042 - 5,572,773 3,549,515 (5,392,069) (2,785,978) 69,065,616 64,146,270 444,936 (2,877,969) (74,902,621) (64,054,279) (5,392,069) (2,785,978)
	(5,392,069)

Note
Assets
Current assets
Cash and cash equivalents
8
Cash and cash equivalents of discontinued operation
8
Trade and other receivables
9
Total current assets
Non-current assets
Property, plant and equipment
10
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
12
Borrowings
13
Employee benefits
14
Provisions
15
Share applications received in advance
Discontinued operations liabilities
7
Total current liabilities
Non-current liabilities
Borrowings
13
Total non-current liabilities
Total liabilities
Net liabilities
Equity
Issued capital
16
Reserves
17
Accumulated losses
Total deficiency in equity

Consolidated

30 June 2013
30 June 2012
$
$
79,636
276,644
6,720
-
81,662
384,551
168,018
661,195
12,687
102,342
12,687
102,342
180,705
763,537
644,949
1,250,388
226,585
293,400
-
4,662
-
2,001,065
110,400
-
2,679,797
-
3,661,732
3,549,515
1,911,042
-
1,911,042
-
5,572,773
3,549,515
(5,392,069)
(2,785,978)
69,065,616
64,146,270
444,936
(2,877,969)
(74,902,621)
(64,054,279)
(5,392,069)
(2,785,978)

(5,392,069)

The accompanying notes are an integral part of these financial statements.

Sprint Energy Limited Consolidated statement of changes in equity For the year ended 30 June 2013

$ $ Consolidated Balance at 1 July 2011 Loss for the year Other comprehensive income - - Total comprehensive income for the year - - Transactions with owners in their capacity as owners: Share-based payments Securities issued during the year Capital raising costs Lapse of options Balance at 30 June 2012 - - $ $ Consolidated Balance at 1 July 2012 Loss for the year Other comprehensive income - - Total comprehensive income for the year - - Transactions with owners in their capacity as owners: Value of imbedded derivative Securities issued during the year Capital raising costs Balance at 30 June 2013 - -	Contributed Accumulated Total equity Reserves losses equity $ $ $ $ 55,540,185 (2,142,293) (64,498,581) (11,100,689) - - (220,609) (220,609) - (218,765) - (218,765)
	- (218,765) (220,609) (439,374) - 148,000 - 148,000 8,846,152 - - 8,846,152 (240,067) - - (240,067) - (664,911) 664,911 -
	64,146,270 (2,877,969) (64,054,279) (2,785,978)
	Contributed Accumulated Total equity Reserves losses Equity $ $ $ $ 64,146,270 (2,877,969) (64,054,279) (2,785,978) - - (10,848,342) (10,848,342) - 3,225,969 - 3,225,969
	- 3,225,969 (10,848,342) (7,622,373) - 96,936 - 96,936 5,114,701 - - 5,114,701 (195,355) - - (195,355)
	69,065,616 444,936 (74,902,621) (5,392,069)

The accompanying notes are an integral part of these financial statements.

Sprint Energy Limited Consolidated statement of cash flows For the year ended 30 June 2013

Note Cash flows from operating activities Receipts from customers (inclusive of GST) Payments to suppliers (inclusive of GST) Interest received Interest and other finance costs paid Net cash used in operating activities 32 Cash flows from investing activities Payments for property, plant and equipment 10 Payments for security deposits Payment of refundable option fee Payments for exploration and evaluation Proceeds from sale of investments Net cash used in discontinued operations Net cash from/(used in) investing activities Cash flows from financing activities Proceeds from issue of shares Cash advanced to other entity Proceeds from borrowings Share issue transaction costs Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash Cash and cash equivalents at the end of the financial year 8	Consolidated 30 June 2013 30 June 2012 $ $ 12,790 131,257 (3,522,199) (3,919,796) 8,465 27,226 (155,972) (153,215) (3,656,916) (3,914,528) - (18,126) - - - - - - - 60,000 (459,547) - (459,547) 41,874 1,563,966 700,000 - - 2,557,563 3,419,000 (195,355) - 3,926,174 4,119,000 190,289 246,346 276,644 30,298 - - 86,355 276,644
	(3,656,916)
	- - - - - (459,547)
	(459,547)
	1,563,966 - 2,557,563 (195,355)
	3,926,174
	190,289 276,644 -
	86,355

The accompanying notes are an integral part of these financial statements.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 . The financial report of Sprint Energy Ltd and controlled entities complies with all International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board ('IASB') in their entirety.

The financial report covers Sprint Energy Limited as a consolidated entity consisting of Sprint Energy Limited and the entities it controlled during the year. Sprint Energy Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

Level 1, 981 Wellington Street West Perth WA 6005 Ph : (08) 6555 2947 Fax : (08) 9321 3102

The principal activities of the consolidated entity were the management of onshore and offshore oil and gas production in the USA and the management of exploration and evaluation activities in Russia.

During the year, the activities in the USA were discontinued.

The financial report is presented in Australian dollars, which is Sprint Energy Limited's functional and presentation currency. The functional currency of its controlled entities in the USA which were discontinued during the year was USD.

The financial report was authorised for issue, in accordance with a resolution of directors, on 30 September 2013.

Basis of preparation

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.

Going concern

The financial report has been prepared on the basis of accounting principles applicable to a going concern, which assumes the commercial realisation of the future potential of the Group’s assets and the discharge of their liabilities in the normal course of business.

The Group has reported a net loss for the year of $10,848,342 (2012: loss of $220,609) and a working capital deficiency of $3,493,714 (deficiency of $2,888,320 at 30 June 2012) and net assets deficiency of $5,392,069 (net assets deficiency of $2,785,978 at 30 June 2012).

At balance date the Group has borrowings totalling $2,137,627, these are via converting notes as outlined in Note 13. Under the terms of the convertible note agreements they are all convertible at the election of the Group. It is envisaged by the Board that all convertible notes will be converted to shares in the Group, subject to Shareholder approval, however the Board have had strong indication that such approval will be forthcoming.

In addition the directors are actively seeking further funding to enable the Company to fund the Tomsk project and the Company’s working capital requirements.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Based on these facts, the directors consider the going concern basis of preparation to be appropriate.

In the event the Company does not receive sufficient funds under the letter of support or raise additional funding, there exists a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and realise its assets and extinguish its liabilities in the normal course of business.

Sprint Energy Limited Notes to the financial statements

30 June 2013

Note 1. Statement of significant accounting policies (continued)

Accounting Policies

Principles of consolidation

Subsidiaries are all those entities over which the consolidated entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The effects of potential exercisable voting rights are considered when assessing whether control exists. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity 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 consolidated entity.

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 transactions and balances

Foreign currency transactions

Foreign currency transactions are translated into Australian dollars 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

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 date of the transaction, for the period. All resulting foreign exchange differences are recognised in 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 consolidated entity and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable.

Oil and gas sales

Sales of oil and gas are recognised at the point of sale, which occurs when the risks and rewards of ownership have transferred to the customer.

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.

Rent

Rent revenue is recognised on a straight-line basis over the lease term. Lease incentives granted are recognised as part of the rental revenue. Contingent rentals are recognised as income in the period when earned.

Other revenue

Other revenue is recognised when it is received or when the right to receive payment is established.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies (continued)

Income tax

The income tax expense or benefit for the year is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and 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 apply 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 investments in subsidiaries, associates or interests in 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 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 entity's which intend to settle simultaneously.

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 consolidated entity 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.

Investments and other financial assets

Investments and other financial assets are measured at either amortised cost or fair value depending on their classification. Classification is determined based on the purpose of the acquisition and subsequent reclassification to other categories is restricted. The fair values of quoted investments are based on current bid prices. For unlisted investments, the consolidated entity establishes fair value by using valuation techniques. These include the use of recent arms length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models.

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies (continued)

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are carried at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the asset is derecognised or impaired.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are either: i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit; or ii) designated as such upon initial recognition, where they are managed on a fair value basis or to eliminate or significantly reduce an accounting mis-match. Except for effective hedging instruments, derivatives are also categorised as fair value through profit or loss. Fair value movements are recognised in profit or loss.

Impairment of financial assets

The consolidated entity assesses at the end of each reporting period whether there is any objective evidence that a financial asset or group of financial assets is impaired. Objective evidence includes significant financial difficulty of the issuer or obligor; a breach of contract such as default or delinquency in payments; the lender granting to a borrower concessions due to economic or legal reasons that the lender would not otherwise do; it becomes probable that the borrower will enter bankruptcy or other financial reorganisation; the disappearance of an active market for the financial asset; or observable data indicating that there is a measurable decrease in estimated future cash flows.

The amount of the impairment allowance for loans and receivables carried at amortised cost 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. If there is a reversal of impairment, the reversal cannot exceed the amortised cost that would have been had the impairment not been recognised and is reversed to profit or loss.

The amount of the impairment allowance for financial assets carried at cost is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the current market rate of return for similar financial assets.

Property, plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment (excluding land) over their expected useful lives as follows:

Plant and equipment 3-7 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.

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.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies (continued)

Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity 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. They are subsequently measured at amortised cost using the effective interest method.

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.

The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of financial position, net of transaction costs.

On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until extinguished on conversion or redemption. The increase in the liability due to the passage of time, is recognised as a finance cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.

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, including:

interest on short-term and long-term borrowings

Provisions

Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, it is probable the consolidated entity 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, annual leave and sick leave

Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Non-accumulating sick leave is expensed to profit or loss when incurred.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies (continued)

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 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 consolidated entity 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.

The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

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 consolidated entity or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity 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.

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.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies (continued)

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to the owners of Sprint Energy Limited, 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 and revised Accounting Standards and Interpretations

Presentation of Items of Other Comprehensive Income

The Group adopted AASB 2011–9: Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income on 1 July 2012. AASB 2011–9 is mandatorily applicable from 1 July 2012 and amends AASB 101: Presentation of Financial Statements.

AASB 2011–9 amends the presentation requirements of other comprehensive income. It requires items of other comprehensive income to be grouped between:

items that will not be reclassified subsequently to profit or loss; and
those that will be reclassified subsequently to profit or loss when specific circumstances occur.

It also requires, when items of other comprehensive income are presented before the related tax effects with a single amount shown for the aggregate amount of income tax relating to those items, the amount of tax effect to be allocated between:

items that will not be reclassified subsequently to profit or loss; and
those that might be reclassified subsequently to profit or loss

AASB 2011–9 also amends AASB 101 to change the title “income statement” to “statement of profit or loss” under the twostatement approach. Although other titles are also permitted, the Group has decided to use the title “statement of profit or loss”.

The adoption of AASB 2011–9 only changed the presentation of the Group’s financial statements and did not have any impact on the amounts reported for the current period or for any prior period in the Group’s financial statements.

Other new and revised Standards and Interpretations issued by the AASB have been considered by the Group and the Group is still assessing their effect on the Group’s financial statements.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies (continued)

New Accounting Standards and Interpretations not yet mandatory or early adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2012, and have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards early.

(a) AASB 9 Financial Instruments (2010), AASB 9 Financial Instruments (2009)

AASB 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under AASB 9 (2009), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. AASB 9 (2010) introduces additions relating to the financial liabilities. The IASB currently has an active project that may result in limited amendments to the classification and measurement requirements of AASB 9 and add new requirements to address the impairment of financial assets and hedge accounting.

AASB 9 (2010 and 2009) are effective for annual periods beginning on or after 1 January 2015 with early adoption permitted. The adoption of AASB 9 (2010) is expected to have no impact on the Group’s financial assets and financial liabilities.

(b) AASB 10 Consolidated Financial Statements , AASB 11 Joint Arrangements , AASB 12 Disclosure of Interests in Other Entities (2011)

AASB 10 introduces a single control model to determine whether an investee should be consolidated.

Under AASB 11, the structure of the joint arrangement, although still an important consideration, is no longer the main factor in determining the type of joint arrangement and therefore the subsequent accounting.

The Group’s interest in a joint operation, which is an arrangement in which the parties have rights to the assets and obligations for the liabilities, will be accounted for on the basis of the Group’s interest in those assets and liabilities.
The Group’s interest in a joint venture, which is an arrangement in which the parties have rights to the net assets, will be equity accounted.

AASB 12 brings together into a single standard all the disclosure requirements about an entity’s interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities. AASB 12 requires the disclosure of information about the nature, risks and financial effects of these interests.

These standards are effective for annual periods beginning on or after 1 January 2013 with early adoption permitted.

AASB 13 provides a single source of guidance on how fair value is measured, and replaces the fair value measurement guidance that is currently dispersed throughout Australian Accounting Standards. Subject to limited exceptions, AASB 13 is applied when fair value measurements or disclosures are required or permitted by other AASBs. AASB 13 is effective for annual periods beginning on or after 1 January 2013 with early adoption permitted.

(d) AASB 13 Employee Benefits (2011)

AASB 119 (2011) changes the definition of short-term and other long-term employee benefits to clarify the distinction between the two. AASB 119 (2011) is effective for annual periods beginning on or after 1 January 2013 with early adopted permitted.

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 within the next financial year are discussed below.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 1. Statement of significant accounting policies (continued)

Share-based payment transactions

The consolidated entity 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 BlackScholes 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.

Provision for impairment of receivables

The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the ageing of receivables, historical collection rates and specific knowledge of the individual debtors financial position.

Impairment of exploration and evaluation

The Group’s policy for exploration and evaluation requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. At the date of this report the Group does not have sufficient reason to believe:

rights to explore in specific areas, once expired, will be renewed;
substantive expenditure on further exploration and evaluation in specific areas has been budgeted;
exploration in specific areas is ongoing and the Group has not decided to discontinue such activities; and
no specific sufficient data exists that indicates that the carrying amount of the exploration and evaluation asset is unlikely to be recovered.

Provision for plugging and abandonment

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. This provision is based on the government cost calculation for plugging and abandoning wells in the State of Texas, with additional contingent amounts estimated by the Directors. Final costs may be higher or lower than the amount prescribed by the government.

Note 2. Operating segments

Identification of reportable operating segments

AASB 8 requires operating segments to be identified on the basis of internal reports about the components of the Group that are regularly reviewed by the chief decision maker in order to allocate resources to the segment and to assess its performance. The Board have been deemed to be the chief decision makers.

In this regard, the following reportable segments have been identified.

Interest revenue Revenue Total segment revenue Elimination of discontinued operation Total consolidated revenue from continuing operations Depreciation and amortisation Finance costs Segment net loss Elimination of discontinued operation Total consolidated loss from continuing operations Segment assets Segment liabilities	Discontinued US Operation Russia Corporate and Treasury $ $ $ - - 8,465 581,821 - 21,896	Total $ 8,465 603,717
	581,821 - 30,361 - - (4,615) - - (78,032)	612,182 (581,821)
		30,361
		(4,615) (78,032)
	(831,062) (5,042,887) (1,479,260) 6,720 - 173,985 2,679,797 - 2,892,976	(7,353,209) 831,062
		(6,522,147)
		180,705 5,572,773

The Group operates in the development of oil and gas within the USA in the financial year ended 30 June 2012. The Group’s activities are therefore classified as one business segment for the comparative period.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 3. Revenue

Sales revenue Natural gas sales Reimbursable operating expenses Other revenue Interest Other revenue - Revenue - Note 4. Other income Gain on reversal of prior year over accrual of liabilities Gain on renegotiation of loans Gain on sale of financial assets Other income	Consolidated 30 June 2013 30 June 2012 $ $ - - - - 8,465 12,770 21,896 45,746 30,361 58,516 30,361 58,516 Consolidated 30 June 2013 30 June 2012 $ $ - 557,422 - 2,987,875 - 32,500 - 3,577,797

The 2011 financial statements included provisions for a number of liabilities relating to the Blackgate acquisition. When signing the 30 June 2011 financial statements the Board took a conservative approach and recognised all of these at the maximum possible payable amount. During the 2012 financial year, the Board reviewed the carrying amount of these liabilities and after taking legal advice found that they were over provided in the financial statements at 30 June 2011. A gain of $2,201,260 was recognised in the 2012 Statement of Profit or Loss and Other Comprehensive Income to state these liabilities at their appropriate amount.

The 30 June 2011 financial statements included loans payable to entities related to former directors. During the prior financial year, the company renegotiated these debts and a gain of $2,987,875 was recognised in the Statement of Profit or Loss and Other Comprehensive Income.

During the prior year the company disposed of its investment in listed entities at a gain of $32,500.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 5. Expenses

Loss before income tax includes the following specific expenses: Cost of sales Depreciation of Property plant and equipment Impairment of Receivables Finance costs Interest and finance charges paid/payable Funding facility fee Finance costs expensed Net loss on disposal of property, plant and equipment	Consolidated 30 June 2013 30 June 2012 $ $ - -
	4,615 3,899
	- 644,142
	78,032 801,559 - 118,333
	78,032 919,892
	- 20,049

Note 6. Income Tax Expense

Numerical reconciliation of income tax expense and tax at the statutory rate Loss before income tax expense Tax at the statutory tax rate of 30% Add tax effect of: Non-deductible expenses Current year tax losses not recognised Current year temporary differences not recognised Income tax expense / (benefit) Components of deferred tax Unrecognised deferred tax asset - losses Unrecognised deferred tax asset – provisions and accruals Unrecognised deferred tax asset – capital raising costs Total unrecognised deferred tax asset	Consolidated 30 June 2013 30 June 2012 $ $ (6,522,147) (220,609) (1,956,644) (66,183) - 216,890 1,978,002 (150,707) (21,358) -
	- -
	2,331,560 1,969,496 13,557 35,044 7,801 (13,870)
	2,352,919 2,141,377

There are no franking credits available to the group.

Net deferred tax assets have not been brought to account as it is not probable within the immediate future that tax profits will be available against which deductible temporary differences and tax losses can be utilised.

The benefit of the tax losses will only be obtained if the group comply with conditions imposed by the tax legislation in Australia.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 7. Discontinued Operation

In March 2013, the group’s board discontinued their USA operation. The segment was not a discontinued operation or classified as held-for-sale as at 30 June 2012 and the comparative consolidated statement of profit or loss and other comprehensive income has been re-presented to show the discontinued operation separately from continuing operations.

Results of discontinued operation Revenue Expenses Results from operating expenses Tax Results from operating activities, net of tax Reclassification of foreign currency differences on discontinued operation Total comprehensive loss for the year Basic loss per shares (cents) Diluted loss per share (cents)	30 June 2013 30 June 2012 $ $ 581,821 1,809,359 (1,412,883) (2,603,156)
	(831,062) (793,797) - -
	(831,062) (793,797) (3,495,133) -
	(4,326,195) (793,797)
	(0.52) (0.23) (0.52) (0.23)

The loss from discontinued operation of $4,326,195 (2012:$ 793,797) is attributable entirely to the owners of the company.

Cash flows from (used in) discontinued operation

Net cash used in operating activities Net cash used in investing activities Net cash from financing activities Net cash flows for the year The discontinued operation comprised the following assets and liabilities: Assets of disposal group held for sale Cash and cash equivalents Trade and other receivables Property, plant and equipment Trade and other payables Provisions – legal claims Provisions – plug & abandonment * Cumulative income or expense included in other comprehensive income Reclassification of foreign currency differences on discontinued operation	(459,547) - - - 445,041 -
	(14,506) -
	6,720 21,226 - 371,634 - 85,040
	6,720 477,900
	492,997 386,162 - 32,367 2,186,8001 1,968,698
	2,679,797 2,387,227
	(3,495,133) -

This provision is based on the government cost calculation for plugging and abandoning wells in the State of Texas, with additional contingent amounts estimated by the Directors. Final costs may be higher or lower than the amount prescribed by the government.

In June 2013, the Company was advised by the Texan government that it is taking all necessary steps to make a demand on the full amount of Modena’s USD$200,000 irrevocable letter of credit. The security deposit, carried in the previous year’s statement of financial position at $344,522, has consequently been written off and excluded as an asset of the discontinued operation.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 8. Current assets - cash and cash equivalents

Cash at bank and on hand Reconciliation of cash Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement of financial position as follows: Cash and cash equivalents Discontinued operation assets Cash at bank earns interest at floating rates based on daily bank deposit rates. The Group's exposure to interest rate risk is discussed in Note 23. The effective interest rate for the 30 June 2013 year was 4.00% (2012: 4.36%)	Consolidated 30 June 2013 30 June 2012 $ $ 79,636 276,644	Consolidated 30 June 2013 30 June 2012 $ $ 79,636 276,644
	79,636 6,720	276,644 -
	86,355	276,644

Note 9. Current assets - trade and other receivables

Trade receivables Other receivables Receivable - Arturus Energy LLC Allowance for impairment of receivable Security deposits for lease restoration Amount owing by BNP Petroleum Allowance for impairment of receivable GST and other tax recoverable - - - - Terms and conditions relating to the above financial instruments:	Consolidated 30 June 2013 30 June 2012 $ $ 9,106 27,112 30,694 1,301 644,142 644,142 (644,142) (644,142) - 344,522 672,035 672,035 (672,035) (672,035) 41,862 11,616
	81,662 384,551

Trade and other receivables are non-interest bearing and generally repayable within 30 days.
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.
The amount owing by other entity is an advance to assist with the acquisition of an oil rig, upon which no interest is charged and the advance is repayable on demand. The fair value approximates the carrying value of the receivable. An allowance for impairment loss is recognised when there is objective evidence that the loan receivable is impaired.
Information about the Group’s exposure to credit risk, foreign currency and interest rate risk in relation to trade and other receivables is provided in Note 23.
The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivable mentioned above.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 9. Current assets - trade and other receivables (continued)

Past due but not impaired

Customers with balances past due but without provision for impairment of receivables amount to $9,106 as at 30 June 2013 ($27,112 as at 30 June 2012).

The consolidated entity did not consider a credit risk on the aggregate balances after reviewing credit terms of customers based on recent collection practices.

The ageing of the past due but not impaired receivables are as follows:

60-90 days 120 + days - -	Consolidated 30 June 2013 30 June 2012 $ $ 9,106 - - 27,112	Consolidated 30 June 2013 30 June 2012 $ $ 9,106 - - 27,112
	9,106	27,112

In determining the recoverability of a trade receivable, the Group considers any changes in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The directors believe that there is no further credit provision required in excess of the allowance for impairment.

Note 10. Non-current assets - property, plant and equipment

Plant and equipment - at cost Less: Accumulated depreciation - -	Consolidated 30 June 2013 30 June 2012 $ $ 18,127 127,416 (5,440) (25,074)	Consolidated 30 June 2013 30 June 2012 $ $ 18,127 127,416 (5,440) (25,074)
	12,687	102,342

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:

Consolidated Balance at 30 June 2011 - - - - Additions Disposals - - - - Depreciation expense - - - - Balance at 30 June 2012 - - - - Additions - - - - Written off - - - - Depreciation expense - - - - Balance at 30 June 2013 - - - -	Plant & Equipment $ 168,880 18,126 (68,755) (15,909)	Total $ 168,880 18,126 (68,755) (15,909)
	102,342 - (85,040) (4,615)	102,342 - (85,040) (4,615)
	12,687	12,687

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 11. Non-current assets - exploration and evaluation

Oil and gas exploration assets Less: Impairment - -	Consolidated 30 June 2013 30 June 2012 $ $ - 29,961,636 - (29,961,636)
	- -

During the year, the Group spent $5,042,887 (2012: $1,103,081) on exploration and evaluation which was recognised in profit or loss.

The directors decided not to progress with the Penza project.

In November 2012, the Group entered into a contract to purchase a 74% interest in OOO Bakcharneftegaz (“BNG”), the holder of Licence Block 71-1 project in Tomsk, Western Siberia, Russia. 146,716,767 shares at $0.02 were issued to Electrosecur as a fee for its service in finding the Tomsk project for the Company.

Under the terms of the agreement, a payment of USD$5 million was supposed to have been made by 31 January 2013 and a further payment of USD$2 million had to have been transferred to BNG no later than 1 March 2013 and a remaining USD$5 million must be made available to BNG in accordance with the established budget for BNG to complete the transaction.

On 6 December 2012, Sprint Energy Limited and the vendor agreed in an Addendum to the original agreement agreed that Sprint’s obligation to provide funding for BNG in the stipulated timeframe is completely subject to Sprint’s ability to obtain the necessary finance.

In April 2013, a non-binding letter of intent was entered into with Hanhong Limited to start an investment process for capital funding of the Tomsk Project. The funding would be exclusively for the purposed of drilling new Well #6.

In May 2013, the Company raised $1.04 million via an unsecured convertible debt instrument. A further $750,000 was raised from a strategic investor in June 2013. Additionally, the investor and the Company have reached an indicative and non-binding agreement to provide a loan to the Company for $10 million by way of high yield non-converting 2 year term loan for the purpose of funding the second well in the Tomsk 71-1 drilling program.

A further Addendum to the original agreement was agreed upon by both parties on 23 May 2013, extending the deadline for re-entry work and funding. The completion of re-entry work has been extended to 1 October 2013 and $5 million of funding now needs to be made available for the Tomsk project by 31 December 2013.

To date, USD$1,400,000 of the amounts due has been paid. The vendor for the Tomsk project has notified the board of Sprint Energy Limited that the Group is currently not in compliance with the payment schedule in the Share Purchase Agreement between the Vendor and the Group. The Group has been in discussions with the vendor to correct the breach of the payment schedule and as per the terms in the agreement with the vendor the Group are required to rectify the outstanding amount (US$600,000) within 23 days from signing this report, to resolve the issue

Note 12. Current liabilities - trade and other payables

Interest payable Trade and other payables	Consolidated 30 June 2013 30 June 2012 $ $ 139,147 97,519 505,802 1,152,869
	644,949 1,250,388

Refer to note 23 for further information on financial instruments.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 13. Current liabilities – borrowings

Convertible notes payable - Current Convertible notes payable - Non-current - -	Consolidated 30 June 2013 30 June 2012 $ $ 226,585 293,400 1,911,042 -
	2,137,627 293,400

At balance sheet date the Group had unsecured convertible notes outstanding with a face value/principal balance of $2,234,564. The break down and principal terms of these note are as follows:

Principle balance:$250,000 Carrying value: $226,585 Interest rate : 2% Termination date : 31 December 2013 Principle balance: $750,000 Carrying value: $719,340 Interest rate : 8% Termination date : 22 November 2014 Principle balance: $1,234,564 Carrying value: $1,191,702 Interest rate : 8% Termination date : 31 January 2015

The notes can be converted to equity at twenty percent less than the Volume Weighted Average Price of the shares traded on the Australian Securities Exchange on the preceding five days. All notes are convertible at the discretion of the Company subject to shareholder approval. The interest accrued at 30 June 2013 was $139,165.

Subsequent to year end a further $79,274 of convertible notes were issued.

Financing arrangements

Unrestricted access was available at the reporting date to the following lines of credit:

Consolidated	Consolidated
30 June	30 June
2013	2012
$	$
-	10,000,000

Truestone finance facility This facility was terminated on 8 August 2012. Note 14. Current liabilities - employee benefits

Annual leave	Consolidated 30 June 2013 30 June 2012 $ $ - 4,662

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 15. Current liabilities – provisions

Legal claims Plug and abandonment - - - -	Consolidated 30 June 2013 30 June 2012 $ $ - 32,367 - 1,968,698
	- 2,001,065

Legal claims

The above provision related to outstanding legal claims with TPE Operating LLC and claims from third parties relating to the original asset purchase. These legal claims were settled during the year.

Plug and abandonment

This provision is based on the government cost calculation for plugging and abandoning wells in the State of Texas, with additional contingent amounts estimated by the Directors. Final costs may be higher or lower than the amount prescribed by the government.

These provisions have been transferred to discontinued operation.

Movements in provisions

Movements in each class of provision during the current financial year, other than employee benefits, are set out below:

Consolidated Carrying amount at 1 July 2011 Amounts used Payments Prior year over provision Issue of shares in consideration for settlement of claim Transfer from non-current provisions Additional provisions recognised in profit or loss Translation of foreign exchange differences Carrying amount 30 June 2012 - - Moved to discontinued operation Carrying amount 30 June 2013	Legal Plug & Claims Abandonment $ $ 1,226,745 - (156,840) (837,538) (200,000) - 807,386 - 1,103,081 - 58,231
	- 32,367 1,968,698
	(32,367) (1,968,698)
	- -

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 16. Equity - issued capital

	Consolidated	Consolidated	Consolidated	Consolidated	Consolidated
		30 June	30 June
	30 June 2013	2012	2013	30	June 2012
	Shares	Shares	$		$
Ordinary shares - fully paid	921,540,359	660,364,963	69,065,616		64,146,270
Movements in ordinary share capital
		No of
Details	Date	shares	Issue price		$
Balance	30 June 2011	248,292,656			55,540,185
Share issue	1 July 2011	1,800,000		$0.02	36,000
Facility drawdown	22 July 2011	38,646,770		$0.02	700,000
Issue on conversion of convertible note	30 December 2011	48,375,000		$0.02	967,500
Issue on conversion of convertible note	16 January 2012	14,150,000		$0.02	283,000
Issue in lieu of services	16 January 2012	3,820,000		$0.02	74,400
Settlement of trade payables	7 February 2012	7,380,000		$0.02	147,600
Issue on conversion of convertible note	27 February 2012	62,500,000		$0.02	1,250,000
Issue on payment of facility fee	27 February 2012	5,000,000		$0.02	118,333
Issue on conversion of convertible note	1 March 2012	10,000,000		$0.04	362,873
Settlement of legal provisions	22 May 2012	10,000,000		$0.02	200,000
Issue on conversion of convertible note	30 June 2012	210,400,537		$0.02	4,706,446
Cost of capital raising					(240,067)
Balance	30 June 2012	248,292,656			55,540,185
Issue on conversion of convertible note	13 August 2012	24,910,114		$0.02	443,400
Share issue	24 August 2012	1,649,307		$0.02	26,364
Share issue	19 September 2012	76,880,000		$0.02	1,537,600
Share issue	20 November 2012	100		$0.02	2
Issue in lieu of services	7 December 2012	146,716,767		$0.02	2,934,335
Settlement of trade payables	7 December 2012	11,019,108		$0.02	173,000
Cost of capital raising					(195,355)
Balance	30 June 2013	921,540,359			69,065,616

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.

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.

Share buy-back

There is no current on-market share buy-back.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 17. Equity - issued capital (continued)

Capital risk management

The consolidated entity's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, obtain new financing or sell assets to reduce debt.

The capital risk management policy remains unchanged from the 30 June 2012 Annual Report.

Note 18. Equity – reserves

Foreign currency reserve Convertible notes – equity portion Share-based payments reserve Options reserve Consolidated Balance at 1 July 2011 Foreign currency translation Lapse of options Options issued as consideration for capital raising costs Balance at 30 June 2012 Foreign currency translation Transfer to profit or loss on discontinued operation Value of imbedded derivative on Convertible Note Balance at 30 June 2013	- - Convertible notes Foreign exchange $ $ - (3,007,204) - (218,765) - - - -	Consolidated 30 June 2013 30 June 2012 $ $ - (3,225,969) 96,936 - 148,000 148,000 200,000 200,000 444,936 (2,877,969) Options and Share based payment Total $ $ 864,911 (2,142,293 - (218,765) (664,911) (664,911) 148,000 70,000
	- (3,225,969) - (269,164) - 3,495,133 96,936 -	348,000 (2,877,969 - (269,164) - 3,495,133 - 96,936
	96,936 -	348,000 444,936

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 18. Equity - reserves (continued)

Options reserve

The reserve is used to recognise amounts received in relation to listed options in the period before they expire or are exercised.

Foreign currency reserve

The reserve is used to recognise exchange differences arising from 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.

Note 19. Dividends

There were no dividends paid, recommended or declared during the current or previous financial year.

Note 20. Financial instruments

Financial risk management objectives

The consolidated entity'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 consolidated entity'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 consolidated entity. The consolidated entity 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 consolidated entity 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.

Risk management is carried out by senior executives under policies approved by the Board of Directors ('Board'). These policies include identification and analysis of the risk exposure of the consolidated entity and appropriate procedures, controls and risk limits. Executives identify, evaluate and hedge financial risks within the consolidated entity's operating units. Executives report to the Board on a monthly basis.

Market risk

Foreign currency risk

The consolidated entity undertakes certain transactions denominated in foreign currency predominantly in relation to tis US subsidiaries, and are 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. The risk is measured using sensitivity analysis and cash flow forecasting.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 20. Financial instruments (continued)

The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the reporting date was as follows:

				Assets	Assets	Liabilities	Liabilities
					30 June	30 June
			30 June	2013	2012	2013	30 June 2012
			$		$	$	$
Consolidated
US dollars				6,720	392,860	2,679,797	494,724
Refer below for a sensitivity analysis in relation to the		consolidated entity's foreign currency				exposure. Given the recent
fluctuations between the two currencies a rate of 10% has		been deemed appropriate.
	AUD strengthened					AUD weakened
		Effect on
		profit				Effect on
Consolidated - 30 June		before	Effect	on		profit	Effect on
2013	% change	tax	equity		% change	before tax	equity
US dollars	10%	-	(256,452)		10%	-	256,452
	AUD strengthened					AUD weakened
		Effect on
		profit				Effect on
Consolidated - 30 June		before	Effect	on		profit	Effect on
2012	% change	tax	equity		% change	before tax	equity
US dollars	10%	-	(10,186)		10%	-	10,186

Price risk

The consolidated entity is not exposed to any significant price risk.

Interest rate risk

The Group’s exposure to risks of changes in market interest rates relates primarily to the Group’s cash balances. The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing positions and the mix of fixed and variable interest rates. As the Group has no variable rate interest bearing borrowings its exposure to interest rate movements is limited to the amount of interest income it can potentially earn on surplus cash deposits. The Company does not account for any fixed rate instruments at fair value.

Refer below for sensitivity analysis:-

	Basis points	increase		Basis points decrease	Basis points decrease	Basis points decrease
		Effect on
		profit		Basis	Effect on
Consolidated - 30 June		before	Effect on	points	profit	Effect on
2013	Basis points change	tax	equity	change	before tax	equity
Cash and cash equivalents	100	796	796	100	(796)	(796)
	Basis points	increase		Basis points decrease
		Effect on
		profit		Basis	Effect on
Consolidated - 30 June		before	Effect on	points	profit	Effect on
2012	Basis points change	tax	equity	change	before tax	equity
Cash and cash equivalents	100	2,766	2,766	100	(2,766)	(2,766)

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 20. Financial instruments (continued)

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. 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 consolidated entity does not hold any collateral.

Receivable balances are monitored on an ongoing basis with the result that the Group does not have a significant exposure to bad debts. The only significant concentration of credit risk was in relation to the loan with Arturus Energy LLC, an entity related to a former director, and the loan with BNP Petroleum. A full impairment of $644,142 and $672,035 has been recognised in relation to these loans in the prior year.

Liquidity risk

Vigilant liquidity risk management requires the consolidated entity 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 consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing and capital raising facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.

Financing arrangements

Unused borrowing facilities at the reporting date:

Truestone finance facility - -	Consolidated 30 June 2013 30 June 2012 $ $ - 8,250,000

Remaining contractual maturities

The following tables detail the consolidated entity'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 and therefore these totals may differ from their carrying amount in the statement of financial position.

Consolidated - 30 June 2013 Weighted average interest rate % Non-derivatives Non-interest bearing Trade payables - Interest-bearing - fixed rate Financial liabilities* 8.00 Total non-derivatives	1 year or less Between 1 and 2 years $ $ 644,949 - 2,137,627 -	Between 2 and 5 years $ - - -	Over 5 years $ - -	Remaining contractual maturities $ 644,949 2,137,627
	2,782,576 -		-	2,782,576

*convertible into debt at the Company’s option

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 20. Financial instruments (continued)

Consolidated - 30 June 2012 Weighted average interest rate % Non-derivatives Non-interest bearing Trade payables - Interest-bearing - fixed rate Financial liabilities 6.00 Total non-derivatives	1 year or less Between 1 and 2 years $ $ 1,250,388 - 293,400 -	Between 2 and 5 years $ - - -	Over 5 years $ - -	Remaining contractual maturities $ 1,250,388 293,400
	1,543,788 -		-	1,543,788

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

Fair value of financial instruments

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial instruments.

Note 21. Key management personnel disclosures

Directors

The following persons were directors of Sprint Energy Limited during the financial year:

Dr Jaap Poll - resigned 31 July 2013 Brad Boyle - resigned 14 December 2012 James Thompson - appointed 30 July 2012, resigned 22 August 2013 Craig Martin - resigned 9 August 2012

Jon Roestenburg – appointed 3 October 2012, resigned 15 February 2013 Andrew Chapman – appointed 8 October 2012 Ken Chad appointed 18 February 2013 Steve Flynn appointed 22 August 2013 Jon Knapp appointed 22 August 2013

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:

Short-term employee benefits Post-employment benefits Share-based payments - -	Consolidated 30 June 2012 30 June 2012 $ $ 547,980 434,270 17,435 21,067 - 78,000
	565,415 533,337

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 21. Key management personnel disclosures (continued)

Shareholding

The number of shares in the parent entity held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

30 June 2013 Ordinary shares A Hamilton1 D Jendry1 Dr Poll2 B Boyle2 J Thompson2 C Martin2 J Roestenburg23 A Chapman4 K Chad	Balance at Received the start of as part of the year remuneration - - - - 1,000,000 - - - - - - - - - - - - - -	Additions - - - - - 750,000 - 200,000 60,541,408 - 60,741,408	Balance at Disposals/ the end of other the year (1,300,000) - (2,500,000) - (1,000,000) - - - - - (750,000) - (200,000) - - 60,541,408 - -	Balance at Disposals/ the end of other the year (1,300,000) - (2,500,000) - (1,000,000) - - - - - (750,000) - (200,000) - - 60,541,408 - -
	1,000,000 -		(3,800,000)	60,541,408

1 Director resigned during the 2012 financial year.

2 Director resigned during the 2013 financial year.

3 acquired through an on market acquisition.

4 Directors opening balance at time of appointment

Other than noted above no other key management personnel held shares during the current financial year.

30 June 2012 Ordinary shares A Hamilton D Jendry Dr Poll*	Balance at Received the start of as part of the year remuneration 1,300,000 - 2,500,000 - - -	Additions - - 1,000,000 1,000,000	Balance at Disposals/ the end of other the year (1,300,000) - (2,500,000) - - 1,000,000	Balance at Disposals/ the end of other the year (1,300,000) - (2,500,000) - - 1,000,000
	3,800,000 -		(3,800,000)	1,000,000

Acquired through an on market acquisition. ** Director resigned during the 2012 financial year.

Other than noted above no other key management personnel held shares during the prior financial year.

Option holding

The number of options over ordinary shares in the parent entity held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

No Key management personnel held options during the 2013 financial year.

30 June 2012 Options over ordinary shares Andrew Mattin *	Balance at the start of the year Granted Exercised - 5,000,000 - - 5,000,000 -	Expired/ forfeited/ other (5,000,000)	Balance at the end of the year -
	-	(5,000,000)	-

During the year Andrew Mattin was issued 5,000,000 as part of his remuneration package, but then resigned on 8 March 2012.

Retention rights holding Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 21. Key management personnel disclosures (continued)

The number of retention rights over ordinary shares in the parent entity held during the financial year by each director and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

There were no options held by directors or key management personnel in the previous financial year.

Related party transactions

Related party transactions are set out in note 28.

Note 22. Remuneration of auditors

During the financial year the following fees were paid or payable for services provided by Nexia Perth Audit Services Pty Ltd, the auditor of the company, and unrelated firms:

Audit services - Nexia Perth Audit Services Pty Ltd Audit or review of the financial statements Audit services - unrelated firms Audit or review of the financial statements	Consolidated 30 June 2012 30 June 2012 $ $ 55,550 50,000	Consolidated 30 June 2012 30 June 2012 $ $ 55,550 50,000
	-	93,333

The fees paid to unrelated firms relates to amounts paid to BDO Audit (WA) Pty Ltd the previous auditor, this includes fees for half year review and additional fees charged in relation to the prior year audit.

Note 23. Contingent liabilities

There were no contingent liabilities at 30 June 2013 or 30 June 2012.

Note 24. Commitments

Rental Commitments Committed at the reporting date but not recognised as liabilities, payable: Within one year One to five years - -	Consolidated 30 June 2013 30 June 2012 $ $ 192,512 178,581 128,342 357,163
	320,854 535,744

There were no other commitments for expenditure at 30 June 2013 or 30 June 2012.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 25. Related party transactions

Parent entity

Sprint Energy Limited is the parent entity.

Subsidiaries

Interests in subsidiaries are set out in note 30.

Key management personnel

Disclosures relating to key management personnel are set out in note 24 and the remuneration report in the directors' report.

Transactions with related parties

The following transactions occurred with related parties:

	Consolidated	Consolidated
	30 June
	2013	30 June 2012
	$	$
Placement and management fees for Convertible notes raised by
Merchant Capital Markets a company that Andrew Chapman is a
director of	223,050
Commission paid to a significant shareholder for Convertible notes
raised	20,000
Payments to a significant shareholder as part of an agreement for
facilitation of the Tomsk project	213,599
Shares given to a significant shareholder as part of an agreement for
facilitation of the Tomsk project	2,934,335
Gain recognised on renegotiations of loans with Arturus Limited (an
entity related to former directors)	-	856,114
Gain recognised on renegotiations of loans with El Dore Limited (an
entity related to former directors)	-	670,653
Gain recognised on renegotiations of loans with Arturus Limited (an
entity related to former directors)	-	833,253

Receivable from and payable to related parties

The following balances are outstanding at the reporting date in relation to transactions with related parties:

	Consolidated	Consolidated
	30 June
	2013	30 June 2012
	$	$
Current payables:
Directors fee payable to Jaap Poll	11,467	25,024
Directors fee payable to Craig Martin	-	52,621
Directors fee payable to Brad Boyle	-	58,316
Directors fee payable to James Thompson	10,000	-
Directors fee payable to Andrew Chapman	10,000	-
Directors fee payable to Ken Chad	10,000	-

Loans to/from related parties

There are no loans to for from the Group outstanding at the reporting date in relation to loans with related parties for 2013 or 2012.

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 26. Parent entity information

Set out below is the supplementary information about the parent entity.

Statement of comprehensive income

Loss after income tax Total comprehensive income Statement of financial position Total current assets Total assets Total current liabilities Total liabilities Equity Issued capital Convertible notes – equity portion Share-based payments reserve Options reserve Accumulated losses Total deficiency in equity	Parent 30 June 2013 30 June 2012 $ $ (6,967,183) (2,108,528) (6,967,183) (2,108,528) Parent 30 June 2013 30 June 2012 $ $ 161,298 268,335
	173,985 285,637
	981,934 1,053,726
	2,892,976 1,053,726
	69,065,616 64,146,270 96,936 - 148,000 148,000 200,000 200,000 (72,229,545) (65,262,359)
	(2,718,991) (768,089)

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 2013 and 30 June 2012.

Contingent liabilities

The parent entity had no contingent liabilities as at 30 June 2013 and 30 June 2012.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment at as 30 June 2013 and 30 June 2012.

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 27. 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:

		Equity holding	Equity holding
		30 June	30 June
	Country of	2013	2012
Name of entity	incorporation	%	%
Murivel Trading SA	Bahamas	100.00	100.00
Blackgate Resources LLC	USA	100.00	100.00
Modena Operating LLC	USA	100.00	100.00
Modena Petroleum LLC	USA	100.00	100.00
Modena Oil Field Services
LLC	USA	100.00	100.00
Modena Oil& Gas LLC	USA	100.00	100.00
Modena South Texas LP	USA	100.00	100.00
Modena South Texas LLC	USA	100.00	100.00

The above were discontinued during the year.

Note 28. Events after the reporting period

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 29. Reconciliation of loss after income tax to net cash used in operating activities

Loss after income tax expense for the year - - Adjustments for: Depreciation and amortisation Net loss on disposal of non-current assets Share-based payments Foreign exchange differences Interest received - non-cash Impairment of exploration expenditure Facility fee settled through issue of shares Loss on discontinued operation Impairment of receivables Net fair value loss/(gain) on financial assets at fair value through the profit and loss. Gain on sale of shares Gain on renegotiation of loans Gain on prior year over provisions Change in operating assets and liabilities: Decrease/(increase) in trade and other receivables Increase/(decrease) in trade and other payables Increase/(decrease) in employee benefits Increase in other provisions Net cash used in operating activities - - Note 30. Non-cash investing and financing activities Convertible notes issued in lieu of services Conversion of convertible notes Shares issued in lieu of services Shares issued to settle legal claims - -	Consolidated 30 June 2013 30 June 2012 $ $ (7,622,372) (220,609) 4,615 15,909 - 20,049 3,107,335 78,000 (269,164) (218,765) - 362,873 - - - 118,333 831,062 - - 644,142 - - - (32,500) - (2,987,875) - (2,201,260) 302,889 64,025 (11,281) (682,563) - (35,599) - 1,161,312 (3,656,916) (3,914,528) Consolidated 30 June 2013 30 June 2012 $ $ 29,564 - 443,400 2,454,167 3,107,335 74,400 - 200,000
	3,580,299 2,728,567

Loss after income tax expense for the year
-
-
Adjustments for:
Depreciation and amortisation
Net loss on disposal of non-current assets
Share-based payments
Foreign exchange differences
Interest received - non-cash
Impairment of exploration expenditure
Facility fee settled through issue of shares
Loss on discontinued operation
Impairment of receivables
Net fair value loss/(gain) on financial assets at fair value through the profit and
loss.
Gain on sale of shares
Gain on renegotiation of loans
Gain on prior year over provisions
Change in operating assets and liabilities:
Decrease/(increase) in trade and other
receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in employee benefits
Increase in other provisions
Net cash used in operating activities
-
-
Note 30. Non-cash investing and financing activities
Convertible notes issued in lieu of services
Conversion of convertible notes
Shares issued in lieu of services
Shares issued to settle legal claims
-
-

Consolidated
30 June 2013
30 June
2012
$
$

(7,622,372)
(220,609)
4,615
15,909
-
20,049
3,107,335
78,000
(269,164)
(218,765)
-
362,873
-
-
-
118,333
831,062
-
-
644,142
-
-
-
(32,500)
- (2,987,875)
- (2,201,260)
302,889
64,025
(11,281)
(682,563)
-
(35,599)
-
1,161,312

(3,656,916)
(3,914,528)
Consolidated
30 June 2013
30 June
2012
$
$
29,564
-
443,400
2,454,167
3,107,335
74,400
-
200,000

3,580,299
2,728,567

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 31. Earnings per share

Consolidated 30 June 2012 30 June 2011 $ $ Loss from continuing operations after income tax attributable to the owners of Sprint Energy Limited (6,522,147) (220,609) Number Number Weighted average number of ordinary shares used in calculating basic earnings per share 833,628,382 350,840,201 Weighted average number of ordinary shares used in calculating diluted earnings per share 833,628,382 350,840,201 Cents Cents Basic/diluted earnings per share (0.91) (0.06) Options have not been included in the calculation of diluted earnings per share as they are not dilutive. Note 32. Share-based payments Set out below are summaries of options granted during the year: No option based payments were made in the 2013 financial year. 30 June 2012 Balance at Expired/ Balance at Exercise the start of forfeited/ the end of Grant date Expiry date price the year Granted Exercis ed other the year 27/02/2012 31/03/15 $0.04 - 5,000,000 - - 5,000,000 27/02/2012 31/03/15 $0.06 - 5,000,000 - - 5,000,000 - 10,000,000 - - 10,000,000	Consolidated 30 June 2012 30 June 2011 $ $ (6,522,147) (220,609)	Consolidated 30 June 2012 30 June 2011 $ $ (6,522,147) (220,609)
	Number Number 833,628,382 350,840,201
	833,628,382 350,840,201
		Cents (0.06) Balance at the end of the year 5,000,000 5,000,000
	-	10,000,000

Set out below are the options exercisable at the end of the financial year:

Grant date Expiry date 27/02/2012 31/03/15 Total exercisable	30 June 2013 30 June 2012 Number Number 10,000,000 10,000,000
	10,000,000 10,000,000

Sprint Energy Limited Notes to the financial statements 30 June 2013

Note 32. Share-based payments (continued)

	Share price	Exercise	Expected	Dividend	Risk-free Fair value
Grant date Expiry date	at grant date	price	volatility	yield	interest rate at grant date
27/02/2012 31/03/2015	$0.02	$0.04	119.79%	0.00%	4.03% $0.016
27/02/2012 31/03/2015	$0.02	$0.06	119.79%	0.00%	4.03% $0.014
These options vested at the grant	date.

Liabilities settled through the issue of shares

2013 Settlement in lieu of services Settlement in lieu of services 2012 Settlement in lieu of services	$ per share No of shares $ 0.02 146,716,767 2,934,335 0.0157 11,019,108 173,000
	0.0197 157,735,875 3,107,335
	$ per share No of shares $ 1.95 3,820,000 74,400

Sprint Energy Limited Directors' declaration

In the directors' opinion:

the attached financial statements and notes thereto 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 thereto 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 thereto give a true and fair view of the consolidated entity's financial position as at 30 June 2013 and of its performance for the financial year ended on that date; and
as disclosed in Note 1 Going Concern, 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) of the Corporations Act 2001.

On behalf of the directors

==> picture [50 x 70] intentionally omitted <==

______ Andrew Chapman Non-Executive Director

30 September 2013 Perth

==> picture [121 x 79] intentionally omitted <==

Independent auditor’s report to the members of Sprint Energy Limited

Report on the financial report

We have audited the accompanying financial report of Sprint Energy Limited which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies, 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 and fair presentation of the financial report that gives a true and fair view in accordance with the 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 report, comprising the financial statements and notes, complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

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 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, we consider internal controls relevant to the entity’s preparation and fair presentation of the financial report 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 entity’s internal controls. 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.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 .

==> picture [159 x 84] intentionally omitted <==

==> picture [594 x 142] intentionally omitted <==

Basis for Qualified Opinion

During the year, Sprint Energy Limited discontinued its operations in the United States of America and has no office or employees left in that location and accordingly those operations are shown as discontinued operations in the Financial Report. Management in Australia have informed us that they may not have received all accounting records for the period and consequently we have been unable to obtain sufficient appropriate evidence over the carrying amount of discontinued assets, the completeness of liabilities and the results from discontinued operations. Consequently we were unable to determine if any adjustments to these operations was necessary.

Opinion

In our opinion, except for the possible effects of the matter described in the Basis of Qualified Opinion paragraph

(a) the financial report of Sprint Energy 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 2013 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 consolidated financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

Emphasis of Matter

Without modifying our opinion above, we draw attention to Note 1 to the Financial Report, which indicates that the Group incurred a net loss of $10,848,342 and as of that date the Group had a working capital deficit of $3,493,714 and net liabilities of $5,392,069. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about the Group’s ability to continue as a going concern and therefore the Group 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 2013. 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 Sprint Energy Limited for the year ended 30 June 2013 complies with Section 300A of the Corporations Act 2001 .

==> picture [91 x 39] intentionally omitted <==

==> picture [594 x 142] intentionally omitted <==

Nexia Perth Audit Services Pty Ltd

==> picture [194 x 55] intentionally omitted <==

Amar Nathwani Director

30 September 2013 Perth

Sprint Energy Limited Shareholder information 30 June 2013

The shareholder information set out below was applicable as at 30 September 2013.

Distribution of equitable securities

Analysis of number of equitable security holders by size of holding:

1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over - - Holding less than a marketable parcel - -	Number of holders of ordinary shares Number of holders of options over ordinary shares (SPSOA) 103 - 180 5 79 7 279 166 336 71
	- 977 249
	- 559 227

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
		% of total
		shares
	Number held	issued
Mr Max Renard	136,716,767		14.75
Provencal Holdings (Wa) Pty Ltd	100,000,000		10.79
The Trust Company (Australia) Limited	60,770,337		6.56
Mr Luke Anthony Jefferson	32,449,212		3.50
Stratos Resources Limited	29,935,840		3.23
Ajava Holdings Pty Ltd	26,160,000		2.82
Mr Robert Reginald Fisher + Mrs Lynette Gladys Fisher Fund A/C>	25,421,349		2.74
Gelc Pty Ltd	20,750,003		2.24
Mr Colin Alexander Mackellar + Mrs Michele Elizabeth Mackellar Mackellar Super Fund A/C>	20,000,000		2.16
Mr Kevin Thomas Mahon	20,000,000		2.16
Mr Paul Bernard Bastion + Mrs Belinda Louise Bastion Fund A/C>	16,500,000		1.78
Hsbc Custody Nominees (Australia) Limited	12,719,382		1.37
Ajava Holdings Pty Ltd	12,500,000		1.35
Skipper (Wa) Pty Ltd	12,500,000		1.35
Bearded Rooster Nominees Pty Ltd	11,000,000		1.19
Pfh (Nsw) Pty Ltd	10,489,198		1.13
Nicole Renard	10,000,000		1.08
Lessar Pty Ltd	9,500,000		1.03
Ingobblein Pty Ltd	9,250,000		1.00
Bell Potter Nominees Ltd	9,000,000		0.97
	341,137,400		63.19

Sprint Energy Limited Shareholder information 30 June 2013

HSBC Custody Nominees (Australia) Limited
Ajava Holdings Pty Ltd
Azur Capital Group Limited
Bell Potter Nominees Ltd
Mr Helmut Rocker
Nefco Nominees Pty Ltd
Wimalex Pty Ltd
Mr Lucas Harvey Gentry
Dejul Trading Pty Ltd
Mrs Kathleen Mary Eddington
AMH Custodian Pty Ltd
David Gartner Pty Ltd
Mr Christopher Williams
Mr James Michael Rocker
Mousetrap Nominees Pty Ltd
Goffacan Pty Ltd
Ms Constantina Atai
Mrs Nicole Ann Gentry
Ms Lynne Gentry
Goffacan Pty Ltd
Unquoted equity securities
Macaronis Pty Ltd
Truestone Capital Limited
Cynthia Nyuk Ha Mattin
Truestone Capital Specialised Investment (Jersey) Ltd

Options over
ordinary shares (SPSOA)
% of total
options
Number held
issued
15,500,000
20.94
9,000,000
12.16
5,000,000
6.76
3,650,000
4.93
3,000,000
4.05
2,240,000
3.03
2,000,000
2.70
1,750,000
2.36
1,600,000
2.16
1,400,000
1.89
1,300,000
1.76
1,200,000
1.62
1,087,500
1.47
1,000,000
1.35
950,000
1.28
826,570
1.12
700,000
0.95
650,000
0.88
600,000
0.81
600,000
0.81
54,054,070
73.03
Number held
%
30,000,000
48.78
25,000,000
40.65
5,000,000
8.13
1,500,000
2.44
61,500,000
100

Substantial holders

Substantial holders in the company are set out below:

	Ordinary shares	Ordinary shares
		% of total
		shares
	Number held	issued
Mr Max Renard	136,716,767	14.75
Provencal Holdings (Wa) Pty Ltd	100,000,000	10.79
The Trust Company (Australia) Limited	60,770,337	6.56
	Options	over
	ordinary shares
		% of total
		options
	Number held	issued

HSBC Custody Nominees (Australia) Limited	15,500,000	20.94
Ajava Holdings Pty Ltd	9,000,000	12.16
Azur Capital Group Limited	5,000,000	6.76

Voting rights

The voting rights attached to ordinary shares are set out below:

Ordinary shares

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.

There are no other classes of equity securities.

CORPORATE GOVERNANCE STATEMENT

The Board of Directors of Sprint Energy Limited is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of Sprint Energy Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. This statement reports on Sprint Energy Limited’s key governance principles and practices.

1 COMPLIANCE WITH BEST PRACTICE RECOMMENDATIONS

The Company, as a listed entity, must comply with the Corporations Act 2001 and the ASX Limited (ASX) Listing Rules. The ASX Listing Rules require the Company to report on the extent to which it has followed the Corporate Governance Recommendations published by the ASX Corporate Governance Council (ASXCGC). Where a recommendation has not been followed, that fact is disclosed, together with the reasons for the departure.

The table below summaries the Company’s compliance with the Corporate Governance Council’s Recommendations:

Principle #	ASX Corporate Governance Council Recommendations	Reference	Comply
Principle 1	Lay solid foundations for management and oversight
1.1	Establish the functions reserved to the board and those delegated to senior executives and disclose those functions.	2(a)	Yes
1.2	Disclose the process for evaluating the performance of senior executives.	2(h), 3(b), Remuneration Report	Yes
1.3	Provide the information indicated in the Guide to reporting on principle1.	2(a), 2(h), 3(b), Remuneration Report	Yes

Principle 2	Structure the board to add value
2.1	A majority of the board should be independent directors.	2(e)	Yes
2.2	The chair should be an independent director.	2(b), 2(c), 2(e)	No
2.3	The roles of chair and chief executive officer should not be exercised by the same individual.	2(b), 2(c)	Yes
2.4	The Board should establish a nomination committee.	2(d)	No
2.5	Disclose the process for evaluating the performance of the board, its committees and individual directors.	2(h)	Yes
2.6	Provide the information indicated in the Guide to reporting on principle2.	2(b), 2(c), 2(d), 2(e), 2(h)	Yes

Principle 3	Promote ethical and responsible decision-making
3.1	Establish a code of conduct and disclose the code or a summary as to:	4(a)	Yes
	 the practices necessary to maintain confidence in the Company’s integrity;
	 the practices necessary to take into account the Company’s legal obligations and the reasonable expectations of its stakeholders; and
	 the responsibility and accountability of individuals for reporting andinvestigatingreports ofunethicalpractices.
3.2	Establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess annually both the objectives and progress in achieving them.	4(b)	Yes
3.3	Companies should disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them.	4(b)	Yes
3.4	Companies should disclose in each annual report the proportion of women employees in the whole organisation, women in senior executive positions and women on the board.	4(b)	Yes
3.5	Provide the information indicated in the Guide to reporting on principle 3.	4(a), 4(b)	Yes

CORPORATE GOVERNANCE STATEMENT

Principle 4	Safeguard integrity in financial reporting
4.1	The Board should establish an audit committee.	3(a)	No
4.2	The audit committee should be structured so that it:	3(a)	No
	 consists only of non-executive directors;
	 consists of a majority of independent directors;
	 is chaired by an independent chair, who is not chair of the Board; and
	 has at least three members.
4.3	The audit committee should have a formal charter	3(a)	No
4.4	Provide the information indicated in the Guide to reporting on principle 4.	3(a)	Yes

Principle 5	Make timely and balanced disclosure
5.1	Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at senior executive level for that compliance and disclose those policies or a summary of those policies.	5(a), 5(b)	Yes
5.2	Provide the information indicated in the Guide to reporting on principle 5.	5(a), 5(b)	Yes

Principle 6	Respect the rights of shareholders
6.1	Design a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings and disclose the policy or a summary of that policy.	5(a), 5(b)	Yes
6.2	Provide the information indicated in the Guide to reporting on principle 6.	5(a), 5(b)	Yes

Principle 7	Recognise and manage risk
7.1	Establish policies for the oversight and management of material business risks and disclose a summary of those policies.	6(a)	Yes
7.2	The Board should require management to design and implement the risk management and internal control system to manage the Company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of its material business risks.	6(a), 6(b), 6(d)	Yes
7.3	The Board should disclose whether it had received assurance from the chief executive officer and the chief financial officer that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.	6(c)	Yes
7.4	Provide the information indicated in the Guide to reporting on principle7.	6(a), 6(b), 6(c), 6(d)	Yes

Principle 8	Remunerate fairly and responsibly
8.1	The Board should establish a remuneration committee.	3(b)	No
8.2	The remuneration committee should be structured so that it: • consists of a majority of independent directors • is chaired by an independent chair •has at least three members.	3(b)	No
8.3	Clearly distinguish the structure on non-executive directors’ remuneration from that of executive directors and senior executives.	3(b), Remuneration Report	Yes
8.3	Provide the information indicated in the Guide to reporting on principle 8.	3(b),	Yes

CORPORATE GOVERNANCE STATEMENT

2. THE BOARD OF DIRECTORS

(a) Roles and Responsibilities of the Board

The Board is accountable to the shareholders and investors for the overall performance of the Company and takes responsibility for monitoring the Company’s business and affairs and setting its strategic direction, establishing and overseeing the Company’s financial position.

The Board is responsible for:

Appointing, evaluating, rewarding and if necessary the removal of the Chief Executive Officer ("CEO") and senior management;
Development of corporate objectives and strategy with management and approving plans, new investments, major capital and operating expenditures and major funding activities proposed by management;
Monitoring actual performance against defined performance expectations and reviewing operating information to understand at all times the state of the health of the Company;
Overseeing the management of business risks, safety and occupational health, environmental issues and community development;
Satisfying itself that the financial statements of the Company fairly and accurately set out the financial position and financial performance of the Company for the period under review;
Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board that proper operational, financial, compliance, risk management and internal control process are in place and functioning appropriately.
Approving and monitoring financial and other reporting;
Assuring itself that appropriate audit arrangements are in place;
Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the Company has adopted a Code of Conduct and that the Company practice is consistent with that Code; and other policies; and
Reporting to and advising shareholders.

Other than as specifically reserved to the Board, responsibility for the day-to-day management of the Company’s business activities is delegated to the Chief Executive Officer and Executive Management.

(b) Board Composition

The Directors determine the composition of the Board employing the following principles:

the Board, in accordance with the Company’s constitution must comprise a minimum of three Directors;
the roles of the Chairman of the Board and of the Chief Executive Officer should be exercised by different individuals;
the majority of the Board should comprise Directors who are non-executive;
the Board should represent a broad range of qualifications, experience and expertise considered of benefit to the Company; and
the Board must be structured in such a way that it has a proper understanding of, and competency in, the current and emerging issues facing the Company, and can effectively review management’s decisions.

The Board currently does not and has not throughout the year comprised of a majority of independent Directors. The board is currently comprised of all non-executive Directors.

The skills, experience, expertise, qualifications and terms of office of each director in office at the date of the annual report is included in the Directors’ Report.

The Chair is independent and the role of Chair and chief executive officer are exercised by two different people.

The Company’s constitution requires one-third of the Directors (or the next lowest whole number) to retire by rotation at each Annual General Meeting (AGM). The Directors to retire at each AGM are those who have been longest in office since their last election. Where Directors have served for equal periods, they may agree amongst themselves or determine by lot who will retire. A Director must retire in any event at the third AGM since he or she was last elected or re-elected. Retiring Directors may offer themselves for re-election.

A Director appointed as an additional or casual Director by the Board will hold office until the next AGM when they may be re-elected. The Chief Executive Officer is not subject to retirement by rotation and, along with and Director appointed as an additional or casual Director, is not to be taken into account in determining the number of Directors required to retire by rotation.

CORPORATE GOVERNANCE STATEMENT

2. THE BOARD OF DIRECTORS CONTINUED

(c) Chairman

The Chairman is responsible for:

leadership of the Board;
the efficient organisation and conduct of the Board’s functions;
the promotion of constructive and respectful relations between Board members and between the Board and management;
contributing to the briefing of Directors in relation to issues arising at Board meetings;
facilitating the effective contribution of all Board members; and
committing the time necessary to effectively discharge the role of the Chairman.

During the year there was a Chair that was is independent. The role of Chair and Chief Executive Officer are exercised by two different people. Subsequent to year end the Chair resigned and Andrew Chapman has temporarily assumed the Chair’s role as Sprint Energy Limited looks to elect a new Chairman.

The Chief Executive Officer is responsible for:

implementing the Company’s strategies and policies; and
the day-to-day management of the Company’s business activities

The Board specifies that the roles of the Chairman and the Chief Executive Officer are separate roles to be undertaken by separate people.

Due to the nature of the Company’s current activities it does not currently have a chief executive officer and this role was, during the financial year, effectively undertaken by the board of directors. The Board considered that, at this stage of the Company’s development, the executive role carried out by the board was in the best interests of the Company. The Board will monitor the need to separate these roles as the Company’s circumstances change and on consideration of the appointment of a new chief executive officer.

(d) Nomination Committee

The Company does not comply with ASX Recommendation 2.4. The Company is not of a relevant size to consider formation of a nomination committee to deal with the selection and appointment of new Directors and as such a nomination committee has not been formed.

Nominations of new Directors are considered by the full Board. If any vacancies arise on the Board, all directors are involved in the search and recruitment of a replacement. The Board has taken a view that the full Board will hold special meetings or sessions as required. The Board are confident that this process for selection and review is stringent and full details of all Directors are provided to shareholders in the annual report and on the Company’s website.

(e) Independent Directors

The Company recognises that independent directors are important in assuring shareholders that the Board is properly fulfilling its role and is diligent in holding senior management accountable for its performance. The Board assesses each of the directors against specific criteria to decide whether they are in a position to exercise independent judgment.

Directors of Sprint Energy Limited are considered to be independent when they are independent of management and free from any business or other relationship that could materially interfere with, or could reasonably be perceived to materially interfere with, the exercise of their unfettered and independent judgement.

CORPORATE GOVERNANCE STATEMENT

2. THE BOARD OF DIRECTORS CONTINUED

In making this assessment, the Board considers all relevant facts and circumstances. Relationships that the Board will take into consideration when assessing independence are whether a Director:

is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
is employed, or has previously been employed in an executive capacity by the Company or another Company member, and there has not been a period of at least three years between ceasing such employment and serving on the Board;
has within the last three years been a principal of a material professional advisor or a material consultant to the Company or another Company member, or an employee materially associated with the service provided;
is a material supplier or customer of the Company or other Company member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; or
has a material contractual relationship with the Company or another Company member other than as a Director.

The Board is currently comprised of three non-executive Directors, two of which are independent.

In accordance with the definition of independence above, and the materiality thresholds set, the following directors of Sprint Energy Limited are considered to be independent:

Name Position Mr Steve Flynn Non-Executive Director Mr Jon Knapp Non-Executive Director

The term in office held by each director in office at the date of this report is as follows:

In recognition of the importance of independent views and the Board’s role in supervising the activities of management the Chairman should be a non-executive director, however refer 2(c) relating to independence of the Chairman.

(f) Avoidance of conflicts of interest by a Director

In order to ensure that any interests of a Director in a particular matter to be considered by the Board are known by each Director, each Director is required by the Company to disclose any relationships, duties or interests held that may give rise to a potential conflict. Directors are required to adhere strictly to constraints on their participation and voting in relation to any matters in which they may have an interest.

(g) Board access to information and independent advice

Directors are able to access members of the management team at any time to request relevant information. There are procedures in place, agreed by the Board, to enable Directors, in furtherance of their duties, to seek independent professional advice at the Company’s expense.

(h) Review of Board performance

The performance of the Board is reviewed regularly by the Chairman. The Chairman conducts performance evaluations which involve an assessment of each Board member’s performance against specific and measurable qualitative and quantitative performance criteria. The performance criteria against which directors and executives are assessed is aligned with the financial and non-financial objectives of Sprint Energy Limited. Primarily, the review will be carried out through consultation by the Chairman and with individual Directors. Directors whose performance is consistently unsatisfactory may be asked to retire.

CORPORATE GOVERNANCE STATEMENT

3. BOARD COMMITTEES

(a) Audit Committee

Given the size and scale of the Company’s operations the full Board undertakes the role of the Audit Committee. The Audit Committee does not comply with ASX Recommendation 4.2 as the Chair of the Board is Chair of the Audit Committee, during the whole of the financial year, did not comprise only Non-Executive Directors. The role and responsibilities of the Audit Committee are summarised below.

The Audit Committee is responsible for reviewing the integrity of the Company’s financial reporting and overseeing the independence of the external auditors. The Board sets aside time to deal with issues and responsibilities usually delegated to the Audit Committee to ensure the integrity of the financial statements of the Company and the independence of the auditor.

The Board reviews the audited annual and half-year financial statements and any reports which accompany published financial statements and recommends their approval to the members. The Board also reviews annually the appointment of the external auditor, their independence and their fees.

The Board is also responsible for establishing policies on risk oversight and management. The Company has not formed a separate Risk Management Committee due to the size and scale of its operations.

External Auditors

The Company’s policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. It is Nexia Perth’s policy to rotate engagement partners on listed companies at least every five years.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the notes to the financial statements in the Annual Report.

There is no indemnity provided by the Company to the auditor in respect of any potential liability to third parties.

The external auditor is requested to attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and preparation and content of the audit report.

Non-audit services provided by the auditors during the year are detailed in the financial statements.

The Company has recently disbanded the audit committee. The Board continues to strive to meet the ASX Corporate Governance Principles and Recommendations or other such principles and guidance as the Board may consider appropriate form time to time, however the Board also recognises that complying the ASX Corporate Governance Principles and Recommendations 4.1-4.3 is impractical given the size of the Company and the industry in which it operates. The board consists of three (3) members and therefore the Directors believe, it is sufficient for the full board to assume those responsibilities that are ordinarily assigned to an audit committee.

(b) Remuneration Committee

The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of establishing appropriate remuneration levels and incentive policies for employees.

The Company has recently disbanded the remuneration committee. The Board continues to strive to meet the ASX Corporate Governance Principles and Recommendations or other such principles and guidance as the Board may consider appropriate form time to time, however the Board also recognises that complying the ASX Corporate Governance Principles and Recommendations 8.1-8.2 is impractical given the size of the Company and the industry in which it operates. The board consists of three (3) members and therefore the Directors believe, it is sufficient for the full board to assume those responsibilities that are ordinarily assigned to a remuneration committee

The responsibilities include setting policies for senior officers remuneration, setting the terms and conditions for the CEO, reviewing and making recommendations to the Board on the Company’s incentive schemes and superannuation arrangements, reviewing the remuneration of both executive and non-executive directors and undertaking reviews of the CEO’s performance.

CORPORATE GOVERNANCE STATEMENT

3. BOARD COMMITTEES CONTINUED

The Company has structured the remuneration of its senior executive, where applicable, such that it comprises a fixed salary, statutory superannuation and participation in the Company’s employee share option plan. The Company believes that by remunerating senior executives in this manner it rewards them for performance and aligns their interests with those of shareholders and increases the Company’s performance.

Non-executive directors are paid their fees out of the maximum aggregate amount approved by shareholders for nonexecutive director remuneration. The Company does not adhere to Recommendation 8.2 Box 8.2 ‘Non-executive directors should not receive options or bonus payments’. The Company has previously granted options to nonexecutive directors and, potentially, will do so in the future. The Board is of the view that options (for both executive and non-executive directors) are a cost effective benefit for small companies such as Sprint Energy Limited that seek to conserve cash reserves. They also provide an incentive that ultimately benefits both shareholders and the optionholder, as optionholders will only benefit if the market value of the underlying shares exceeds the option strike price. Ultimately, shareholders will make that determination.

The board policy is to remunerate Directors at market rates for time, commitment and responsibilities. The Board determines payments to the Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. Fees for Non-Executive Directors are not linked to the performance of the Consolidated entity. However, to align Directors’ interests with shareholders’ interests, the Directors are encouraged to hold shares in the Company.

The Company’s aim is to remunerate at a level that will attract and retain high-calibre directors and employees. Company officers and Directors are remunerated to a level consistent with the size of the Company.

The Board believes that it has implemented suitable practices and procedures that are appropriate for an organisation of this size and maturity.

In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive compensation is separate and distinct.

In determining remuneration, the Board has taken a view that the full Board will hold special meetings or sessions as required. No Director participated in any deliberation regarding his or her own remuneration or related issues. The Board are confident that this process for determining remuneration is stringent and full details of remuneration policies and remuneration received by directors and executives in the current period is contained in the “Remuneration Report” within the Directors’ Report of the Annual Report.

4. ETHICAL AND RESPONSIBLE DECISION MAKING

(a) Code of Ethics and Conduct

The Board endeavours to ensure that the Directors, officers and employees of the Company act with integrity and observe the highest standards of behaviour and business ethics in relation to their corporate activities. The “Code of Conduct” sets out the principles, practices, and standards of personal behaviour the Company expects people to adopt in their daily business activities.

All Directors, officers and employees are required to comply with the Code of Conduct. Senior managers are expected to ensure that employees, contractors, consultants, agents and partners under their supervision are aware of the Company’s expectations as set out in the Code of Conduct.

All Directors, officers and employees are expected to:

a. comply with the law;
b. act in the best interests of the Company;
c. be responsible and accountable for their actions; and
d. observe the ethical principles of fairness, honesty and truthfulness, including prompt disclosure of potential conflicts.

CORPORATE GOVERNANCE STATEMENT

4. ETHICAL AND RESPONSIBLE DECISION MAKING CONTINUED

(b) Diversity Policy

The Company recognises that a diverse and talented workforce is a competitive advantage and that the Company’s success is the result of the quality and skills of our people. As such, the Board has adopted a policy to recruit and manage on the basis of qualification for the position and performance, regards of gender, age, nationality, race, religious beliefs, cultural background, sexuality, or physical ability. It is essential that the Company employs the appropriate person for each job and that each person strives for a high level of performance.

Gender proportions:

Currently the Company has no women directors, 0% senior executive staff are female.

5. TIMELY AND BALANCED DISCLOSURE

(a) Shareholder communication

The Company believes that all shareholders should have equal and timely access to material information about the Company including its financial situation, performance, ownership and governance. The Company’s “ASX Disclosure Policy” encourages effective communication with its shareholders by requiring that Company announcements:

be factual and subject to internal vetting and authorisation before issue;
be made in a timely manner;
not omit material information;
be expressed in a clear and objective manner to allow investors to assess the impact of the information when making investment decisions;
be in compliance with ASX Listing Rules continuous disclosure requirements; and
be placed on the Company’s website promptly following release.

Shareholders are encouraged to participate in general meetings. Copies of addresses by the Chairman or Chief Executive Officer are disclosed to the market and posted on the Company’s website. The Company’s external auditor attends the Company’s annual general meeting to answer shareholder questions about the conduct of the audit, the preparation and content of the audit report, the accounting policies adopted by the Company and the independence of the auditor in relation to the conduct of the audit.

(b) Continuous disclosure policy

The Company is committed to ensuring that shareholders and the market are provided with full and timely information and that all stakeholders have equal opportunities to receive externally available information issued by the Company. The Company’s “ASX Disclosure Policy” described in 5(a) reinforces the Company’s commitment to continuous disclosure and outline management’s accountabilities and the processes to be followed for ensuring compliance.

The policy also contains guidelines on information that may be price sensitive. The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements with the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX.

6. RECOGNISING AND MANAGING RISK

The Board is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. The Company’s policies are designed to ensure strategic, operational, legal, reputation and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Company’s business objectives. A written policy in relation to risk oversight and management has been established (“Risk Management and Internal Control Policy”). Considerable importance is placed on maintaining a strong control environment. There is an organisation structure with clearly drawn responsibilities.

CORPORATE GOVERNANCE STATEMENT

6. RECOGNISING AND MANAGING RISK CONTINUED

(a) Board oversight of the risk management system

The Company is not currently considered to be of a size, nor is its affairs of such complexity to justify the establishment of a separate Risk Management Committee. Instead, the Board, as part of its usual role and through direct involvement in the management of the Company’s operations ensures risks are identified, assessed and appropriately managed. Where necessary, the Board draws on the expertise of appropriate external consultants to assist in dealing with or mitigating risk.

The Board is responsible for approving and overseeing the risk management system. The Board reviews, at least annually, the effectiveness of the implementation of the risk management controls and procedures.

The principle aim of the system of internal control is the management of business risks, with a view to enhancing the value of shareholders' investments and safeguarding assets. Although no system of internal control can provide absolute assurance that the business risks will be fully mitigated, the internal control systems have been designed to meet the Company's specific needs and the risks to which it is exposed.

Annually, the Board is responsible for identifying the risks facing the Company, assessing the risks and ensuring that there are controls for these risks, which are to be designed to ensure that any identified risk is reduced to an acceptable level.

The Board is also responsible for identifying and monitoring areas of significant business risk. Internal control measures currently adopted by the Board include:

(a) at least quarterly reporting to the Board in respect of operations and the Company’s financial position, with a comparison of actual results against budget; and
(b) regular reports to the Board by appropriate members of the management team and/or independent advisers, outlining the nature of particular risks and highlighting measures which are either in place or can be adopted to manage or mitigate those risks.

(b) Risk management roles and responsibilities

The Board is responsible for approving and reviewing the Company’s risk management strategy and policy. Executive management is responsible for implementing the Board approved risk management strategy and developing policies, controls, processes and procedures to identify and manage risks in all of the Company’s activities.

The Board is responsible for satisfying itself that management has developed and implemented a sound system of risk management and internal control.

(c) Chief Executive Officer and Chief Financial Officer Certification

The Chief Executive Officer and Chief Financial Officer, or equivalent, provide to the Board written certification that in all material respects:

(a) The Company’s financial statements present a true and fair view of the Company’s financial condition and operational results and are in accordance with relevant accounting standards;
(b) The statement given to the Board on the integrity of the Company’s financial statements is founded on a sound system of risk management and internal compliance and controls which implements the policies adopted by the Board; and
(c) The Company’s risk management an internal compliance and control system is operating efficiently and effectively in all material respects.

(d) Internal review and risk evaluation

Assurance is provided to the Board by executive management on the adequacy and effectiveness of management controls for risk on a regular basis.

AI assistant

CYCLIQ GROUP LTD — Annual Report 2013

64746_rns_2013-09-30_658e0b7e-61f1-4b7d-9779-82fb454d93de.pdf

Sprint Energy Limited ACN 119 749 647

Contents

Sprint Energy Limited Directors' report 30 June 2013

Directors

Principal activities

Dividends

Review of operations

Highlights

LOI signed with Hanhong

About Hanhong

Strategic Investor funding and loan

Sprint Energy Limited Directors' report 30 June 2013

Tomsk Project, Russia

Padre Island, USA

Penza Project, Russia

Corporate

Significant changes in the state of affairs

Sprint Energy Limited Directors' report

30 June 2013

Matters subsequent to the end of the financial year

Future developments, prospects and business strategies

Exploration Risk

Environmental regulation

Information on directors

Andrew Chapman

Information on directors

Company secretary

Meetings of directors

Remuneration report (audited)

A Principles used to determine the nature and amount of remuneration

Remuneration Report (Audited)

Non-executive directors remuneration

Executive remuneration

Remuneration Report (Audited

Consolidated entity performance and link to remuneration

B Details of remuneration

Amounts of remuneration

C Service agreements

D Share-based compensation

Issue of shares

Issue of Options

This concludes the remuneration report, which has been audited.

Shares under option

Shares issued on the exercise of options

Indemnity and insurance of officers

Indemnity and insurance of auditor

Proceedings on behalf of the company

Dividends

Non-audit services

Officers of the company who are former audit partners of Nexia Perth Audit Services Pty Ltd

Auditor's independence declaration

Auditor

Auditor’s independence declaration under section 307C of the Corporations Act 2001

Amar Nathwani Director

Sprint Energy Limited Consolidated statement of profit or loss and other comprehensive income For the year ended 30 June 2013

Sprint Energy Limited Consolidated statement of financial position As at 30 June 2013

Sprint Energy Limited Consolidated statement of changes in equity For the year ended 30 June 2013

Sprint Energy Limited Consolidated statement of cash flows For the year ended 30 June 2013

Note 1. Statement of significant accounting policies

Basis of preparation

Historical cost convention

Going concern

Sprint Energy Limited Notes to the financial statements 30 June 2013

30 June 2013

Note 1. Statement of significant accounting policies (continued)

Accounting Policies

Principles of consolidation

Operating segments

Foreign currency transactions and balances

Foreign currency transactions

Foreign operations

Revenue recognition

Oil and gas sales

Interest

Rent

Other revenue

Note 1. Statement of significant accounting policies (continued)

CYCLIQ GROUP LTD Annual Report 2013