Chairman’s overview Alastair McGregor I am pleased to present the 2023 Annual Report for Cue Energy Limited and happy to share another year of growth and robust development. Dear Shareholders, Our accomplishments include a 16% increase in revenue to $51.6 million, marking the highest revenue reported by the company in over a decade. Profit remained high at $15.2 million and strong operational performance, as indicated by EBITDAX of $30.9 million. The year saw Cue report production of 630,000 barrels of oil equivalent (boe), supported by new production from the PV-12 gas well in the Palm Valley field and the addition of six production wells in the Mahato PSC. Despite a moderation in global energy prices following last year’s impact, we anticipate a sustained demand for our products with corresponding price alignment. The global oil price has increased by over 20% since the commencement of FY24, while contracted gas prices in Australia continue to mirror projections of gas shortages in the Eastern Australia market in the years to come. Throughout the year, I have engaged with several shareholders who have expressed frustration and concern around the share price performance. The board and I empathise with this sentiment, particularly as the company continues to report strong growth and profitability from its operations without a corresponding positive reaction in the share price. I extend my gratitude to shareholders who have shared their perspectives and ideas with the company. The board will continually monitor this situation whilst also reviewing our Capital Management program. We have repaid $3 million of our debt during the year, and we will prioritise the repayment of the remaining debt held by the company. The evolving landscape of government regulations continues to shape our business strategy and management. In New Zealand, we are actively involved in discussions surrounding the introduction of decommissioning financial assurance regulations, which might impact the utilisation of cashflow from Maari. The introduction of a gas price cap by the Australian Government in 2022 created a period of uncertainty in the market. Addressing the gas supply shortage is vital to ensuring stability in Australia’s domestic energy system. We commend the mandatory gas code of conduct for exempting smaller producers like Cue, although we maintain our reservations about regulatory interference in markets. Looking at the year ahead we will continue with our development plans across the portfolio whilst also remaining attentive to fresh growth opportunities. In the Mahato PSC, two development wells have already been completed in FY24 and two more are scheduled. In addition, the Mereenie Joint venture is planning two development wells. This is complimented by several production optimisation projects, including flare gas recovery in the Mereenie field and increased water injection capacity at Maari. Furthermore, we have recently announced an MOU to explore the recovery and sale of Helium from the Mereenie gas production. All of this is possible given the financial stability of our balance sheet enabling Cue to fund these initiatives from existing cash reserves. I would like to extend my gratitude to all our shareholders for their continued support and commend the diligence of our staff in Melbourne and Jakarta, under the leadership of our CEO, Matthew Boyall. FY24 is looking to be another active year, as we continue to work with our partners to achieve our goals safely and efficiently. Alastair McGregor Chairman Overview 4 Cue Energy Resources Limited Annual Report 2023
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