Cue Energy Resources Limited Directors' report 30 June 2023 9 We work closely with our partners to achieve mutually beneficial outcomes. Reserves and resources Estimating oil and gas reserves and resources is subject to significant uncertainties associated with technical data and the interpretation of that data, future commodity prices, and development and operating costs. There can be no guarantee that the Consolidated Entity will successfully produce the volume of hydrocarbons that it estimates as reserves or that hydrocarbon resources will be successfully converted to reserves. The Consolidated Entity’s reserves and resources estimates are prepared by qualified, experienced engineers in accordance with the 2018 update to the Petroleum Resources Management System sponsored by the Society of Petroleum Engineers, World Petroleum Council, American Association of Petroleum Geologists and Society of Petroleum Evaluation Engineers (SPE-PRMS). Exploration and Development The Consolidated Entity’s projects are at various stages of exploration, development and production. Oil and gas exploration and development activities can be high-risk undertakings and there can be no assurance that the exploration or development of any projects will result in the discovery of, and ability to realise any economic resources. Even if an apparently viable oil and gas resource is identified, there is no guarantee that it can be economically produced. Exploration and development activities may be affected by a range of factors including geological conditions, limitations on activities due to seasonal weather patterns or adverse weather conditions, unanticipated operational and technical difficulties, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated reservoir problems which may affect production volumes and/or costs, industrial disputes, unexpected shortages and increases in the costs of plant and equipment, native title processes, changing government regulations and many other factors beyond the Consolidated Entity’s control. Production The Consolidated Entity’s oil and gas production is exposed to interruptions which may result from mechanical or technical failure, pipeline access, project delays or other unforeseeable events. Restrictions on the movement and supply of personnel and products due to external influences such as geopolitical unrest or conflict and a pandemic may also cause interruption to production. A significant interruption to production could result in loss of revenue and additional costs to repair or replace equipment. Regulatory risk The Consolidated Entity currently operates in Australia, Indonesia and New Zealand and is subject to changes in government policy or statutory changes that may affect our business operations and financial position. A change in government regime may significantly result in changes to fiscal, monetary, property rights and other issues which may result in a material adverse impact on Consolidated Entity’s business and its operations. Profitability may be affected by changes in government taxation and royalty policies or the interpretation and application of policies in our operating jurisdictions. The Consolidated Entity monitors changes in relevant regulations and engages with regulators and governments to ensure policy and law changes are appropriately understood. Any failure to comply with or changes to applicable laws, regulations or permits, even if non-compliance is inadvertent, could result in material fines, penalties, changes in the cost of operations, additional investment or other liabilities. In extreme cases, non-compliance with or amendments applicable laws, regulations or permits could result in suspension of activities or forfeiture of one or more of the Consolidated Entity’s projects. Access to infrastructure Our oil and gas sales are dependent on access to third party owned infrastructure. Infrastructure failure, such as pipelines and processing facilities, increased tariffs or restrictions on access to third party infrastructure may have a material effect on financial performance. The Consolidated Entity works with its project partners, customers and infrastructure suppliers to understand and mitigate the risk of delays or failure. 31 Cue Energy Resources Limited Annual Report 2023
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