Cue Energy Resources Limited Directors' report 30 June 2023 10 Permit Risk All petroleum licences held by the Consolidated Entity are subject to the granting and approval of relevant government bodies and ongoing compliance with licence terms and conditions, including periodic requirements for renewal or extension. The Consolidated Entity monitors project operators’ tenure management processes and standard operating procedures to minimise the risk of losing tenure. Litigation The Consolidated Entity is not currently involved in any litigation. However, in the ordinary course of business we may become involved in litigation and disputes, for example with our partners, contractors or employees over a broad range of matters. Any such litigation or dispute could involve significant economic costs and damage to relationships with partners or other stakeholders. Outcomes of any litigation may have an adverse impact on the Consolidated Entity’s business, market reputation and financial condition and financial performance. Health Safety and Environmental risk Exploration, development, production and transportation of oil and gas involves a variety of risks which may impact the health and safety of personnel, the community and the environment. Natural disasters, operational error and equipment failure, amongst other things, could result in oil and gas leaks or spills or loss of well control which may lead injury or loss of life, damage to equipment and facilities, legal liability and reputational damage. Losses or liabilities from such events could reduce revenue or increase costs and materially impact Consolidated Entity’s financial position. The Consolidated Entity works with project operators to ensure processes and procedures are in place to minimise these risks and seeks to maintain appropriate insurance policies to mitigate against the financial effects of any incident. Climate change and the development of alternative energy sources The Consolidated Entity's operating environment is and will continue to be impacted by the continually developing impact of climate change and the response needed to ensure the well-being of the global community. The adverse impact of climate change continues to impact the search for and development of alternative energy sources to those historically based on the use of hydrocarbons in the generation of energy for industrial and private use. The Consolidated Entity is conscious of its responsibilities in respect of minimising the impact of its operations on the environment, however, fundamental shifts in the commercial availability of alternative energy sources developed as a result of the adverse impact of climate change may impact the Consolidated Entity's future operational and financial performance. Digital and Cyber Security Any information technology system is potentially vulnerable to interruption and/or damage from a number of sources, including but not limited to computer viruses, cyber security attacks and other security breaches, power, systems, internet and data network failures, and natural disasters. The Consolidated Entity is committed to preventing and reducing cyber security risks through outsourcing the IT environment which it utilizes to a reputable service provider. Reliance on key personnel The Consolidated Entity’s success depends to a significant extent upon its key management personnel, as well as other staff and technical personnel including those employed on a contractual basis. The loss of the services of such personnel or the reduced ability to recruit additional personnel could have an adverse effect on the Consolidated Entity's performance. We maintain a mix of permanent staff and expert consultants to advance its projects and ensure access to multiple skill sets. The remuneration policy is reviewed regularly to ensure it appropriately reflects current and expected employment conditions and best practices. Refer to the Financial and Operations review preceding this Director's Report. Significant changes in the state of affairs There were no significant changes in the state of affairs of the Consolidated Entity during the financial year. 32 Cue Energy Resources Limited Annual Report 2023
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