61 Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. Restoration provision relating to the Maari field included within provisions of $16.8 million Refer to Note 12 Provisions The key audit matter How the matter was addressed in our audit We identified the restoration provision for the Maari field as a key audit matter due to: • the estimation uncertainty relating to the updated forecast restoration cash flows, which require auditor judgement to evaluate their appropriateness; and • the significant size of the restoration provision relative to the Group’s financial position. The Group incurs obligations to close, restore and rehabilitate its sites and associated facilities. We focused on the following key assumptions made by the Group in determining its restoration provision for the Maari field: • useful lives of assets, giving consideration to the economic reserves and resources and production profiles; • the interpretation of legislative regulatory requirements governing the Group’s obligations; • the cost and timing of future rehabilitation costs; and • discount and forecast inflation rates applied by the Group to determine the net present value of forecast cash flows for the restoration provision. Our procedures included: • evaluated the Group’s accounting policy for the measurement of the restoration provision for consistency with regulatory requirements and the criteria in the accounting standards; • assessed the design of the Group’s process to determine the restoration provision. This included the review and approval by the Group of key calculation inputs including reserves and resources and future restoration costs; • assessed the nature and extent of work performed by the operator’s external expert in identifying future restoration activities and assessing the timing and likely cost of such activities. We compared the nature and extent of restoration work to the relevant regulatory requirements. We assessed the consistency of timing between planned restoration activities and the Group’s reserves and resources estimates and expected production profile; • evaluated the scope, competency and objectivity of the operator’s external experts and the scope and competency of the Group’s competent person responsible for the estimation of economic reserves and resources in accordance with industry standards; • used our knowledge of the Group and our industry experience to challenge the reasonability of the future restoration costs and their timing; • evaluated discount and forecast inflation rates applied by the Group to determine the net present value of the restoration provision against publicly available data, including risk free rates; • assessed the integrity of the provision calculation, including the accuracy of the underlying calculation formulas; • assessed the appropriateness of the Group’s disclosures in the financial report, using our understanding obtained from our testing and against the requirements of accounting standards. Key Audit Matters 83 Cue Energy Resources Limited Annual Report 2023
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