For personal use only - asx.com.au · eureka E N E R G Y 2 annual report 2011 CHAIRMAN’S LETTER Dear Fellow Shareholders, I am pleased to welcome you to this report on …

2011.ANNUAL REPORT

eurekaE N E R G Y

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eurekaE N E R G Y

CORPORATE DIRECTORY

DIRECTORS

Mr Ian McCubbing – ChairmanMr Peter Mills – Managing DirectorMr Mark Wilson – Non-Executive Director

COMPANY SECRETARY

Mr Alex Neuling

REGISTERED AND PRINCIPAL OFFICE

Level 116 Ord Street West Perth WA 6005Telephone: (61 8) 9321 9337Facsimile: (61 8) 6314 1557

HOUSTON, USA OFFICE

Eureka Energy Limited5100 Westheimer, Suite 200Houston, TX 77056Tel: +1 713 588 4404

SHARE REGISTER

Computershare Investor Services Pty LtdLevel 2, 45 St Georges TerracePerth WA 6000Telephone: (61 8) 9323 2000Facsimile: (61 8) 9323 2033

SOLICITORS

Gilbert and Tobin1202 Hay Street West Perth WA 6005

AUDITOR

BDO Audit (WA) Pty Ltd38 Station StreetSubiaco WA 6008

BANKERS

Westpac Banking CorporationLevel 17, 109 St Georges TerracePerth WA 6000

STOCK EXCHANGE LISTING

Eureka Energy Limited sharesare listed on the Australian Securities Exchange (Symbol: EKA)

WEBSITE AND EMAIL

www.eurekaenergy.com.au [email protected]

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annual report 2011 1

Chairman’s Letter 2

Operational Report 3

Directors’ report 8

Remuneration report 14

Auditor’s independence declaration 19

Independent audit report to members 20

Financial Report

Consolidated Statement of Comprehensive Income 22

Consolidated Statement of Financial Position 23

Consolidated Statement of Cash Flows 24

Consolidated Statement of Changes in Equity 25

Notes to the Consolidated Financial Statements 26

Directors’ declaration 55

Corporate Governance Statement 56

ASX Information 62

CONTENTS

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annual report 20112

CHAIRMAN’S LETTER

Dear Fellow Shareholders,

I am pleased to welcome you to this report on what has been an important year for your company and trust that you share my enthusiasm about our prospects for the new year.

During the past financial year, Eureka put in place the key building blocks required to both grow its asset base and establish itself in the investment community.

This transition included appointing an independent Board of Directors. The Company also recruited Peter Mills, initially as a non-executive Technical Director and subsequently on 1 July 2011 as Eureka’s Managing Director. The Board is confident that Peter has the managerial and technical skills, as well as vast experience gained from working for major oil and gas companies, to drive Eureka’s growth and financial performance.

Peter will be strongly supported by a combination of the in-house technical team and highly-regarded consultants who have recently come on board. Eureka’s ability to secure the services of these consultants has been aided by the Company’s decision to establish an office in Houston.

These appointments, along with more mundane but crucial measures such as establishing a corporate office and building databases , all form part of the transition Eureka has made in the past year. As a result, I believe the company now has the pillars in place to underpin its next chapter of growth.

Development in the Sugarloaf area has continued to progress rapidly. There are now 22 producing wells and Eureka’s share of 2P reserves has increased by 40 per cent from the 31 December 2010 position, to 6.7mmboe. These reserves have been assessed to have a pre-tax NPV of US$119 million, or US50 cents a share.

Marathon, a major US corporation, recently acquired the operating role at the Sugarloaf Project. Marathon is expected to increase significantly the number of wells at Sugarloaf, helping to underpin the next chapter of growth.

During the year we have increased our acreage in the Eagleford Shale from just under 1500 acres to over 6,700 acres. The new acquisitions are in two areas to the north-east of the Sugarloaf AMI.

Drilling of the Blackjack Springs Unit enabled us to substantially de-risk the Pan d’Azucar project for a low capital cost and already production is flowing from our first well.

The technical work necessary to advance our newest area, Brioche, is underway and we are confident that we should be able to progress this prospect in a similar manner to Pan d’Azucar.

I have no doubt that Eureka has excellent assets and a strong growth profile. With this in mind, much of the Company’s emphasis this year is on driving increased value and returns for shareholders.

Finally, thanks to my fellow directors, management and the Company’s advisors for their excellent efforts over the past year.

We look forward to a rewarding 2012.

Ian McCubbingChairman

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OPERATIONAL REPORT

Summary and OverviewEureka currently has three core assets with a combined net acreage position of 6,730 acres, all focussed on the Eagle Ford shale onshore Texas in the U.S.A. The assets are in different levels of maturity throughout the value chain, from ongoing production and development, appraisal and development, and initial technical development. The assets include the Sugarloaf Asset in Karnes County (6.25% WI); Pan de Azucar Asset in Fayette County (100% WI), which includes the Black Jack Springs Drilling Unit (9.4% WI); the Brioche Asset in Burleson and Washington Counties (100% WI).

Sugarloaf Asset (EKA 6.25% Working Interest)

Eureka owns a 6.25% working interest in the Sugarloaf Area of Mutual Interest (“AMI”) comprising continuous leases covering 24,150 acres (1,509 acres net to Eureka). The Sugarloaf asset is located within the gas-condensate rich part of the Eagle Ford. Further to this, the Sugarloaf asset is considered to be one of the sweetest spots for high yield liquids within the Eagle Ford. The 2011 financial year saw a significant increase in activity being undertaken in the Sugarloaf asset. At reporting date, the Company has 22 wells now producing, one well being drilled in the Sugarloaf asset and one further well awaiting fracture stimulation.

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The majority of the Sugarloaf leases with expiry dates during 2011 are now being held by production, and the Operator will continue to schedule wells to effectively manage the lease expiry dates. Eureka is currently budgeting to participate in the 22 well drilling plan, as notified by the operator, and expects to be fully funded for the current schedule of activities.

Sugarloaf well being drilled August 2011

OPERATIONAL REPORT (cont’d)

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Pan de Azucar Project (Pan de Azucar Area 100% Working Interest and BlackJack Springs Drilling Unit 9.4% Working Interest)

During the year, Eureka entered into an agreement with Georesources Limited to form the Black Jack Springs Drilling Unit, by combining 86 acres from Eureka’s Pan de Azucar asset with 830 acres from Georesources adjacent acreage. This enabled the Company to participate in an initial well with an experienced operator, while contributing approximately 10% of the capital cost. This has provided a low cost means of de-risking the evaluation of the Pan de Azucar asset. Eureka’s interests in Pan de Azucar are now structured as a 100% Working Interest in 675 gross acres and a 9.4% working interest in a further 916 gross acres referred to as the Black Jack Springs Drilling Unit.

The first well at the Pan de Azucar area, Black Jack Springs Unit 1H, was spudded on the 26th of April 2011 and reached total depth of 16,680ft, with a horizontal section of approximately 6,000ft on the 3rd of June. Subsequent to the end of the financial year, the well was successfully placed on production with encouraging results. The well is now producing to sales and well results confirm Eureka’s geological model of the Eagle Ford Shale trending North East from Sugarloaf. Technical studies are now underway as the company progresses the asset towards development.

Black Jack Springs Tree Black Jack Springs Process Equipment

Brioche Asset (EKA 100% Working Interest)

On the 3rd of May 2011, Eureka announced that it had secured a 100% working interest of 3,975 acres in the Eagle Ford Shale in Burleson and Washington Counties, referred to as the Brioche asset. The opportunity was identified by the same technical team that identified the Sugarloaf asset and the Pan de Azucar asset. The Company has since undertaken a technical study, including the building of a 3D geological model on the acreage and surrounding area, and this work consolidates the initial indications that the Brioche acreage sits close to the volatile oil / gas condensate boundary and that the Eagle Ford shale in this acreage has all the geological prerequisites to be a successful Eagle Ford project.

Subsequent to the end of the reporting period, the Company acquired a further 485 adjoining acres in the Burleson and Washington counties, taking the total Brioche acreage to 4,460 acres.

Eureka’s technical team in Houston are now undertaking detailed technical development studies to identify a well location to confirm the reservoir potential of the Eagle Ford shale and overlying Austin Chalk.

Production

The 2011 financial year saw the commencement of production for Eureka and by year end, a total of 22 wells were producing to sales from the Sugarloaf AMI. Total net production for the 2011 Financial Year was 32848 bbls of oil and 113 MMscf of gas, and the Company should see a continued increase in production as the development plan is implemented through the forthcoming year.F

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Reserves

The ongoing development of the Sugarloaf AMI has progressed significantly, leading to a substantial revision to Eureka’s reserves. Eureka commissioned a revision to the December 2010 “Reserve and Future Revenue” report by Netherland, Sewell & Associates, Inc. (“NSAI”), which was referenced to the 31st August, 2011.

The most significant impact of the report was to credit the extensive drilling activities in the Sugarloaf AMI with total proved net reserves of 2.2MMbbls of oil, condensate and natural gas liquids (NGLs) and 5.5Bcf of natural gas. This was seen as a significant step in recognising Eureka’s value in the Sugarloaf Asset. Eureka’s net reserves are provided in Table 1.

Category

Net Reserves

Oil, Condensate & NGL (Million Barrels)

Gas (MMCF)

Proved Developed Producing 0.3 636.9

Proved Undeveloped 1.9 4,813.4

Total Proved (1P) 2.2 5,450.3

Probable 2.5 6,712.7

Proved + Probable (2P) 4.7 12,162.0

Table 1. Reserves by category from NSAI

In addition to estimating the remaining reserves, Eureka also requested NSAI to estimate future revenue associated with those reserves (Table 2). The method involved calculating future net revenue to Eureka after deducting royalties, state production taxes, ad valorem taxes, capital expenditure, operating expenditure and abandonment costs, but not company income taxes.

Future Net Revenue (USD millions)

Category Total Net Present Value at 10% Discount Rate

Proved 114.8 62.3

Probable 131.7 56.5

Totals 246.5 118.9

Table 2. Future Net Revenue to Eureka

To calculate future net revenue, oil and NGL prices used were based on NYMEX West Texas Intermediate prices and adjusted for quality, transportation fees and regional price differential. Gas prices were based on NYMEX Henry Hub prices and are adjusted for energy content, transportation fees, and a regional price differential. All prices before adjustment are shown on Table 3.

Period Ending Oil Price (USD/Barrel)Gas Price

(USD/MMBTU)

Dec 2011 89.18 4.204

Dec 2012 91.01 4.578

Dec 2013 92.13 5.055

Dec 2014 92.31 5.327

Dec 2015 92.78 5.538

Thereafter 93.30 5.735

Table 3. Prices before adjustments used to calculate NPV

OPERATIONAL REPORT (cont’d)

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SummaryEureka’s acreage position within the highly attractive Eagle Ford shale onshore Texas in the U.S.A. provides the Company with a strong foundation for ongoing revenue and future growth. The 2011 Financial Year saw a high level of drilling activities and this is expected to further increase in 2012 Financial Year.

A key milestone for Eureka was the commencement of production from its second asset, Pan de Azucar, and this adds further production to the Company’s portfolio. The successful development of Pan de Azucar has also provided a framework that could be utilised in the future development of the Company’s other prospects. The continuing development of these assets is expected to lead to an increase in reserves for the Company.

Eureka’s technical team in Houston is actively working on developing the Pan de Azucar and Brioche assets, and these assets will add a new dimension to the Company’s exciting Eagle Ford portfolio.

Technical Information contained in this report has been reviewed by Mr Peter Mills B.Eng, Managing Director of Eureka who has had 29 years experience in petroleum engineering and has consented to the inclusion of the information in the form and context in which it appears.

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eurekaE N E R G Y

annual report 20118

Your Directors submit the annual financial report of the consolidated entity consisting of Eureka Energy Limited and the entities it controlled during the period for the financial year ended 30 June 2011. In order to comply with the provisions of the Corporations Act, the directors report as follows:

DirectorsThe following persons were directors of Eureka during the financial year and up to the date of this report:

Current Directors

Mr Ian McCubbing (Appointed 5 July 2010)

Mr Mark Wilson (Appointed 5 July 2010)

Mr Peter Mills (Appointed 19 October 2010)

Former Directors

Mr Alex Neuling (Appointed 17 September 2010, resigned 19 October 2010)

Mr Graham Dowland (Resigned 5 July 2010)

Mr Timothy Grice (Resigned 5 July 2010)

Mr Michael Price (Resigned 17 September 2010)

Current DirectorsMr Ian McCubbing – Chairman Qualifications - B.Com(Hons), MBA(Ex), CA, M.A.I.C.D

Mr McCubbing is a Chartered Accountant with more than 30 years corporate experience including mergers and acquisitions, project finance and investment banking from both the borrower’s and provider’s side. Ian has spent more than 15 years working with ASX-listed companies in senior finance roles, including positions as Finance Director and Chief Financial Officer in mining and industrial companies, including most recently as the Chief Financial Officer of GRD Limited.

Other Current Directorships of Australian Listed public companies

Mr McCubbing is also a non-executive Director of Swick Mining Services Limited (appointed 2 August 2010), Mirabela Nickel Limited (appointed 1 January 2011) and Kasbah Resources Limited (appointed 1 March 2011).

Former Directorships of Australian Listed public companies in the last 3 yearsMr McCubbing was formerly a Director of Territory Resources from 5 May 2008, resigned 31 July 2011.

Special responsibilitiesChair of the Board

Mr Peter Mills – Managing DirectorQualifications - B.Eng

Mr Mills is an Engineer with extensive experience in the upstream oil and gas business in technical and general management roles working in Europe, Northern Africa, Asia and Australia. Over the past 29 years Peter has worked for Woodside, BHP Petroleum, Hess and Premier Oil in areas of field development, operations management, joint venture management and commercial negotiation.

He retains a strong technical involvement in oil and gas operations, particularly in field development, production optimisation and the application of technology to enhance production and value. His most recent work has focused on development of “unconventional” tight gas reservoirs.

Other Current Directorships of Australian Listed public companiesNone

Former Directorships of Australian Listed public companies in the last 3 yearsNone

Special responsibilitiesNone

DIRECTORS’ REPORT

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Mr Mark Wilson – Independent non-executive DirectorQualifications - MIE Aust CP Eng

Mr Wilson is a member of the Institution of Engineers Australia and a Chartered Professional Engineer with an Associateship in Civil Engineering from Curtin University in Western Australia. Mark has an extensive business background, mainly in corporate management and project engineering.

Mark is Managing Director of Legend Mining Limited, and served as a Director of Duketon Goldfields NL in 1995/1996 and of Cambrian Resources NL (Servicepoint Ltd) from 1999 to 2003.

Other Current Directorships of Australian Listed public companiesLegend Mining Limited


Special responsibilitiesChair of the audit & risk committeeChair of the remuneration & nomination Committee

Former DirectorsMr Graham Dowland – Former Chairman (resigned 5 July 2010)Qualifications - B.Com, CA

Mr Dowland has for the past 20 years, been involved as either a significant shareholder, director or senior consultant / advisor with a number of public companies listed on Stock Exchanges in Australia, Canada and the United Kingdom with operations internationally. These companies have been and continue to be involved in various industries including pharmaceutical research and development – specifically human and animal biotechnology, oil and gas exploration and production, gold mining and exploration, manufacturing, and industrial technology development and marketing.

Mr Dowland has been involved in the development phase of numerous businesses that have achieved listings and capital raisings from the various major international Stock Exchanges.

Other Current Directorships of Australian Listed public companiesMr Dowland is also Chairman of Imugene Limited (Appointed 30 August 2002) and Finance Director of Aurora Oil & Gas Limited (Appointed 22 February 2005).

Former Directorships of Australian Listed public companies in the last 3 yearsMr Dowland previously held the position of Chairman of Mint Wireless Ltd between October 2006 and January 2008.

Special responsibilitiesFormerly Chair of the Board

Mr Michael Price – Independent non-executive Director (resigned 17 September 2010)Qualifications – BEcon, MBA, FAICD

Mr Price has broad commercial experience via an extensive career in the finance sector variously holding responsibility for business and risk portfolios. Since leaving the finance sector he was the Chief Operating Officer for one of Australia’s largest property funds management businesses with responsibility for 17 public trusts prior to its sale. Mr Price is currently a director of a number of private investment companies.



Special responsibilitiesFormerly Chair of the audit committee

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Mr Timothy Grice – Independent non-executive Director (resigned 5 July 2010)

Mr Grice has broad experience in capital markets where he has worked for the past 23 years. He has held a number of senior advisor positions with leading international investment banks (UBS and Merrill Lynch) and national stockbroking firms (Potter Warburg and Bell Potter) and has been involved in the raising of capital for many emerging companies in mining and technology.



Special responsibilitiesFormerly Chair of the remuneration committee

Mr Alex Neuling – Finance Director & company secretary (appointed 17 September 2010, resigned 19 October 2010)Qualifications – BSc(Hons), ACA (ICAEW), ACIS

Alex is a Chartered Accountant and Chartered Secretary with over 10 years corporate and financial experience including 6 years as director, chief financial officer and / or secretary of various ASX listed companies in the oil & gas, mineral exploration, biotechnology and mining services sectors. Prior to those roles, Alex worked at Deloitte in London and Perth. Alex also holds an honours degree in Chemistry from the University of Leeds in the United Kingdom and in principal of Erasmus Consulting Pty Ltd (“Erasmus”), which provides company secretarial and financial management consultancy services to a variety of ASX listed and other companies.

Alex was appointed to the Board on 17 September 2010, having also previously acted as Director and Company Secretary of Eureka from June 2006 to May 2009. As stated elsewhere in this report, Eureka has no full time employees but has engaged Alex (via Erasmus) to provide company secretarial and outsourced finance executive services on a part-time basis as required by the Board.

Other Current Directorships of Australian Listed public companiesMozambi Coal Limited


Company SecretaryThe Company Secretary is Mr Alex Neuling, details of Alex Neuling’s qualifications and experience are found in the “former Directors” section above.

Prior to Alex’s appointment as Company Secretary on 5 July 2010, the Company Secretary was Ms Julie Foster.

Principal activitiesThe principal activity of the Consolidated Entity during the financial year was oil and gas exploration and production. No significant change in the nature of this activity occurred during the financial period.

DividendsNo dividends have been declared, provided for or paid in respect of the financial year ended 30 June 2011.

Summary review of operations For the financial year ending 30 June 2011 the Group recorded a net profit of US $1,100,000 (2010: loss of US $452,000) and a net cash inflow from operations of US $1,284,000 (2010: outflow of US $612,000).

During the 2011 financial year Eureka continued to focus its activities on its US based oil and gas assets. Highlights for the year include the receipt of first revenues from production at the Sugarloaf AMI, and the successful drilling of the Black

DIRECTORS’ REPORT (cont’d)

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Jack Springs well in its Pan de Azucar asset. In addition, the company more than doubled its net acreage position in the Eagle Ford Shale with the acquisition of 3,975 acres in Burleson and Washington Counties, referred to as its Brioche asset. At reporting date, the company has further increased its holding in the Brioche asset to 4,460 acres. The company is now participating in approximately 32,000 gross acres and holds 6,730 net acres within the Eagle Ford Shale play in Texas. The Company’s Eagle Ford acreage is held in three core assets, and as of the report date, has 23 wells producing, one well being drilled and one well to be fracced in these assets.

Sugarloaf Asset (EKA 6.25% Working Interest)

The Sugarloaf asset is located within the Eagle Ford shale play in Texas, which is considered to be one of the premium shale plays in North America. Further to this, the Sugarloaf asset is considered to be one of the sweetest spots for high yield liquids within the Eagle Ford. The 2011 financial year saw a significant increase in activity being undertaken in the Sugarloaf asset. At reporting date, the company has 22 wells now producing, one well being drilled in the Sugarloaf asset and one further well awaiting fracture stimulation.

The majority of the Sugarloaf leases with expiry dates during 2011 are now being held by production, and the Operator will continue to schedule wells to effectively manage the lease expiry dates. Eureka is currently budgeting to participate in a total of 22 new wells during 2012 and expects to be fully funded for these activities.

Pan de Azucar Project (Pan de Azucar Area 100% Working Interest and BlackJack Springs Drilling Unit 9.4% Working Interest)

The first well at the Pan de Azucar area, Black Jack Springs Unit 1H, was spudded on the 26th of April 2011 and reached total depth of 16,680ft, with a horizontal section of approximately 6,000ft on the 3rd of June. Subsequent to the end of the financial year, the well was successfully placed on production with encouraging results. The well is now producing to sales and well results confirm Eureka’s geological model of the Eagle Ford Shale trending North East from Sugarloaf. Technical studies are now underway as the Company progresses the asset towards development.

Brioche Asset (EKA 100% Working Interest)

On the 3rd of May 2011, Eureka announced that it had secured a 100% working interest of 3,975 acres in the Eagle Ford Shale in Burleson and Washington Counties, referred to as the Brioche asset. The opportunity was identified by the same technical team that identified the Sugarloaf asset and the Pan de Azucar asset. The Company has since undertaken a technical study, including the building of a 3D geological model on the acreage and surrounding area, and this work consolidates the initial indications that the Brioche acreage sits close to the volatile oil / gas condensate boundary and that the Eagle Ford shale in this acreage has all the geological prerequisites to be a successful Eagle Ford project.

Subsequent to the end of the reporting period, the Company acquired a further 485 adjoining acres in the Burleson and Washington counties, taking the total Brioche acreage to 4,460 acres.

Eureka’s technical team in Houston are now undertaking detailed technical development studies to identify a well location to confirm the reservoir potential of the Eagle Ford shale and overlying Austin Chalk.

CorporateBoard Changes

On 5 July 2010 Eureka announced the appointment of Mr Ian McCubbing and Mr Mark Wilson and the resignation of Mr Graham Dowland and Mr Timothy Grice.

On September 17 2010, Mr Michael Price resigned as a Director and the Company Secretary, Mr Alex Neuling was appointed to the Board. On 19 October 2010 Mr Peter Mills was appointed as a Non-Executive Director and Mr Alex Neuling resigned from the Board. Mr Neuling remains Company Secretary.

Subsequently, on 1st July 2011, Eureka announced the appointment of Mr Peter Mills to the office of Managing Director and Chief Executive Officer.

Capital Raisings

In August 2010, the Company completed a fully underwritten non renounceable pro-rata offer to shareholders at A$0.17 per share to raise approximately A$4.4 million before costs. Subsequently during November 2010 the Company completed a share placement at A$0.25 per share to sophisticated investors to raise an additional A$6.5 million and a further placement of 30 million shares to sophisticated investors at A$0.36 per share was completed in April 2011. Funds raised are being applied to acquisition, exploration and development costs for the Company’s US Oil & Gas Properties as well as general working capital.

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Consolidated results

2011 2010

US $ ‘000RestatedUS $ ‘000

Consolidated profit (loss) before income tax benefit 800 (452)

Income tax benefit 300 -

Net profit (loss) 1,100 (452)

Significant changes in the state of affairsNo significant changes in the state of affairs of the Consolidated Entity occurred during the financial year and to the date of this report other than as referred to in the Summary Review of Operations.

Post reporting date events

Other than as mentioned above or elsewhere in this report, financial statements, or notes thereto, at the date of this report there are no other matters or circumstances which have arisen since 30 June 2011 that have significantly affected or may significantly affect:

(a) the Consolidated Entity’s operations in future years; or(b) the results of those operations in future financial years; or(c) the Consolidated Entity’s state of affairs in future financial years.

Likely developments Due to the nature of the Consolidated Entity’s business activities, the Directors are not able to state:

(a) likely developments in the entities’ operations; or(b) the expected results of these operations, as to do so would result in unreasonable prejudice to the Consolidated Entity.

Environmental regulationThe Consolidated Entity’s environmental obligations are regulated under Australian and US State and Federal laws. The Company has a policy of exceeding or at least complying with its environmental performance obligations.

During the financial year, the Consolidated Entity did not materially breach any particular or significant Federal, Commonwealth, State or Territory regulation in respect to environmental management.

Greenhouse gas and energy data reporting requirementsThe Consolidated Entity has reviewed its obligations under the Energy Efficiency Opportunities Act 2006 and the National Greenhouse and Energy Reporting Act 2007 and does not consider that it has any reporting requirements under these Acts.


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Information on Directors’ interests in securities of EurekaAs at the date of this report, the interests of the directors in the shares and options of Eureka are:

Number of fully paid ordinary

shares

Number of options

Ian McCubbing 3,740,279 -

Mark Wilson 4,158,334 -

Peter Mills - 2,250,000

7,898,613 2,250,000

On 18 August 2011, Eureka announced the issue of 2,250,000 unlisted share options to Mr Peter Mills.

Meetings of DirectorsThe following table sets out the number of meetings of the Company's directors held during the year ended 30 June 2011, and the number of meetings attended by each Director (includes matters decided by circulating resolution).

No. eligible to attend No. attended

Full board meetings

Ian McCubbing (appointed 5 July 2010) 12 12

Mark Wilson (appointed 5 July 2010) 12 11

Peter Mills (appointed 19 October 2010)

Mr Alex Neuling (appointed 17 September 2010, resigned 19 October 2010)

Mr Michael Price (resigned 17 September 2010)

Mr Graham Dowland (resigned 5 July 2010)

Mr Timothy Grice (resigned 5 July 2010)

5

2

5

1

1

5

2

5

1

1

Audit committee meetings

Ian McCubbing (appointed 5 July 2010) 1 1

Mark Wilson (appointed 5 July 2010) 1 1

Peter Mills (appointed 19 October 2010) - -

Mr Graham Dowland (resigned 5 July 2010) - -

Mr Timothy Grice (resigned 5 July 2010) - -

Mr Michael Price (resigned 17 September 2010). - -

Alex Neuling (appointed 17 September 2010, resigned 19 October 2010). 1 1

Remuneration committee meetings

Ian McCubbing - -

Mark Wilson - -

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Share OptionsAt the date of this report the Company has 2,250,000 unlisted options on issue. No shares were issued on the exercise of options during the year ended 30 June 2011.

REMUNERATION REPORTThis 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

E Additional information

This remuneration report outlines the director and executive remuneration arrangements of the Company and Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purpose of this report, key management personnel (KMP) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and Group, directly or indirectly, including any director (whether executive or otherwise) of the Parent Company, and includes the highest paid executives of the Company and Group.

The information provided in this remuneration report has been audited as required by section 308(3c) of the Corporations Act 2001.

Details of key management personnel

Directors

Mr Ian McCubbing (Chairman)

Mr Peter Mills (Non-executive director)

Mr Mark Wilson (Non-executive director)

G. Dowland (resigned 5 July 2010)

M.Price (resigned 17 September 2010)

T. Grice (resigned 5 July 2010)

A.Neuling (appointed 17 September 2010, resigned 19 October 2010)

During the 2011 financial year, the Group had no employees.

The Directors represent the highest paid executives of the Group.

No remuneration was paid to directors of the Group by Group companies other than Eureka Energy Limited, accordingly remuneration paid to key management personnel of the Group is the same as that paid to key management personnel of the Company.


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A. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION

The objective of the Board, acting in its capacity as the Company’s remuneration committee, is to ensure that pay and rewards are competitive and appropriate for the results delivered. The remuneration committee charter adopted by the Board aims to align rewards with achievement of strategic objectives and the creation of value for shareholders. The remuneration framework applied provides a mix of fixed and variable pay and a blend of short and long term incentives as appropriate.

Remuneration of executives consists of an unrisked element (base pay) and cash bonuses based on performance in relation to key strategic, non-financial measures linked to drivers of performance in future reporting periods. As such, remuneration is not linked to the financial performance of the Company in the current or previous reporting periods.

At present, the functions of the remuneration committee in relation to the remuneration of the Company’s executives (including share and benefit plans) are carried out by the full board. No directors are present at meetings of the board where their own remuneration is being considered. Issues of remuneration are considered annually or otherwise as required.

Non-executive Directors

The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at General Meetings and is currently set at AUD $300,000. The Company’s policy is to remunerate non-executive directors at market rates (for comparable companies) for time, commitment and responsibilities. Fees for non-executive directors are not linked to the performance of the Company, however to align directors’ interests with shareholders’ interests, directors are encouraged to hold shares in the Company.

In addition to Directors’ fees, non-executive Directors are entitled to additional remuneration as compensation for work outside the scope of non-executive director duties (whether performed in a consulting or part-time employee capacity). Non-executive directors’ fees and payments are reviewed annually by the board.

Retirement benefits and allowances

No retirement benefits or allowances are paid or payable to non-executive Directors of the Company other than Superannuation benefits.

Other benefits

No motor vehicle, health insurance or other similar allowances are made available to Directors.

Executives

During the 2011 financial year, the Company had no full time executives.

Base payExecutives are offered a competitive level of base pay which comprises the fixed (unrisked) component of their pay and rewards. Base pay for senior executives is reviewed annually to ensure market competitiveness. There are no guaranteed base pay increases included in any senior executives’ contracts.

Short-term incentivesPayment of short-term incentives is dependent on the achievement of key performance milestones as determined by the remuneration committee. These milestones require performance in relation to key strategic, non-financial measures linked to drivers of performance in future reporting periods.

Short-term bonus payments may be adjusted up or down in line with under or over achievement relative to target performance levels at the discretion of the remuneration committee.

For the year ended 30 June 2011 and the comparative period, no short-term incentives were paid or payable to Directors or Key Management Personnel of the Company or Group.

Long-term incentivesLong-term performance incentives to date have comprised of options granted at the discretion of the remuneration committee in order to align the objectives of directors with shareholders and the Company (refer section D for further information). The issue of options require shareholder approval.

The grant of share options is not directly linked to previously determined performance milestones or hurdles as the current stage of the Group’s activities makes it difficult to determine effective and appropriate key performance indicators and milestones.

There is currently no board policy in relation to the person granted the option, limiting his or her exposure to risk in relation to the securities.

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B. DETAILS OF REMUNERATION

Amounts of remuneration

Details of the remuneration of the directors and Key Management Personnel and Executives of Eureka Energy Limited and the Group are set out in the following table.

2011

Short-term benefits Post-employment benefits

Share-based

payment

Total

Cash salary

and feesCash

bonus

Non-monetary benefits

Super-annuation

Retirement benefits Options

US $ US $ US $ US $ US $ US $ US $

Non-executive directors

Ian McCubbing 49,280 - - 3,326 - - 52,606

Mark Wilson 42,973 - - - - - 42,973

Peter Mills 31,107 - - 2,800 - - 33,907

Alex Neuling (Resigned 19 October 2010) 3,456 - - - - - 3,456

Michael Price (Resigned 17 September 2010) 25,523 - - 678 - - 26,201

Timothy Grice (Resigned 5 July 2010) - - - - - - -

Sub-Total non-executive directors 152,339 - - 6,804 - - 159,143

Executive director

Graham Dowland (Resigned 5 July 2010) - - - - - - -

Executives - Company secretary

Alex Neuling (Appointed 5 July 2010) 68,703 - - - - - 68,703

Total 221,042 - - 6,804 - - 227,846

2010 (restated USD)


Michael Price 34,610 - - 3,115 - - 37,725

Timothy Grice 35,378 - - 2,857 - - 38,235

Sub-Total non-executive directors 69,988 - - 5,972 - - 75,960

Executive director

Graham Dowland 101,858 - - - - - 101,858

Executives - Company secretary

Julie Foster - - - - - - -

Total 171,846 - - 5,972 - - 177,818


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During the period to 30 June 2011 no at-risk short-term or long-term incentives were paid or payable to Directors or Key Management Personnel of the Company / Group (2010: nil).

No cash bonuses were forfeited during the year by Directors or Key Management Personnel or remained unvested at year-end (2010: nil).

All options granted to directors or Key Management Personnel have vested. No options were exercised or forfeited during the year.

C. SERVICE AGREEMENTS

During the year ended 30 June 2011, the Company did not have any full time executives or permanent staff. The Directors were therefore required to perform management duties which are considered to be beyond the normal scope of their tenure as Non-Executive Directors. In order to be compensated for the additional time spent in the management of Eureka, the Directors have been paid additional fees as consultants to the Company. The additional fees for Directors are set at a maximum of US $1,971 per day of service to the Company. Subsequent to year end, the Company appointed a full time Managing Director and it is intended that future consulting payments for Non-Executive Directors will only occur in exceptional circumstances.

Remuneration and other forms of agreement for the Company’s non-executive directors are formalised in letters of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office of director. The major provisions of the agreements relating to remuneration are set out below. Non-executive directors’ fees are set at US $42,973 inclusive of superannuation but excluding any additional fees which may be payable as compensation for special exertions outside the normal scope of non-executive duties. The Chairman is entitled to standard fees of US $53,716 (inclusive of superannuation but excluding any additional fees for special exertions). No termination benefits are payable to non-executive directors under the terms of their letters of appointment.

Remuneration and other terms of agreement with Alex Neuling in his capacity as the Company Secretary are formalised in an agreement with Erasmus Consulting Pty Ltd (a related entity of Mr Neuling), which was entered into prior to his appointment. The agreement is on normal commercial terms and provides for a minimum monthly retainer plus hourly rates and has a three month notice period.

Details of the service fees paid or payable to the Directors and Key Management Personnel of the Group for special exertions that are outside the normal scope of duties are set out in the following table.

2011

Consulting fees Superannuation Total

US $ US $ US $


Ian McCubbing 34,977 - 34,977

Mark Wilson 36,753 - 36,753

Peter Mills 52,714 4,744 57,458

Total Directors and Company Executives 124,444 4,744 129,188

D. SHARE-BASED COMPENSATION

No options were granted to Key Management Personnel during the current or prior financial year and there were no grants of options affecting remuneration in the previous or this reporting year. Subsequent to year end, 2,250,000 unlisted options were issued to Mr Peter Mills.

E. ADDITIONAL INFORMATION

No remuneration options were granted to Key Management Personnel during the year. Also, no such options vested, lapsed or were exercised during the year.

- End of audited remuneration report -

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Non-Audit Services No non-audit services were provided to the Group by the auditors during the year (or by another person or firm on the auditors’ behalf) and accordingly the directors are satisfied that the auditor has complied with the general standard of independence for auditors imposed by the Corporations Act 2001.

Insurance and Indemnity of Officers and AuditorsDuring the year the Company has paid a premium in respect of a contract insuring the directors of the Company (as named above) and the Company Secretary against liabilities incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred as such an officer or auditor.

Auditors’ Independence DeclarationThe auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is included on page 19 of the financial report.

This report is made in accordance with a resolution of the directors made pursuant to section 298(2) of the Corporations Act 2001.


Perth, Western Australia

30 September 2011


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Tel: +8 6382 4600Fax: +8 6382 4601 www.bdo.com.au

38 Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia

BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania.

30 September 2011

The Board of Directors Eureka Energy Limited Level 3, Ord Street WEST PERTH WA 6005

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PETER TOLL TO THE DIRECTORS OF EUREKA ENERGY LIMITED

As lead auditor of Eureka Energy Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Eureka Energy Limited and the entities it controlled during the period.

Peter Toll Director

BDO Audit (WA) Pty Ltd Perth, Western Australia




30 September 2011

The Board of Directors Eureka Energy Limited Level 3, Ord Street WEST PERTH WA 6005

Dear Sirs,

DECLARATION OF INDEPENDENCE BY PETER TOLL TO THE DIRECTORS OF EUREKA ENERGY LIMITED

As lead auditor of Eureka Energy Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Eureka Energy Limited and the entities it controlled during the period.

Peter Toll Director

BDO Audit (WA) Pty Ltd Perth, Western Australia

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INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EUREKA ENERGY LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Eureka Energy Limited, which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and 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 of the financial report that gives a true and fair view in accordance with 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 is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

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 about 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, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view 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 control. 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. We confirm that the independence declaration required by the Corporations Act 2001,which has been given to the directors of Eureka Energy Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.




INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF EUREKA ENERGY LIMITED

Report on the Financial Report

We have audited the accompanying financial report of Eureka Energy Limited, which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and 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 of the financial report that gives a true and fair view in accordance with 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 is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

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 about 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, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view 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 control. 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. We confirm that the independence declaration required by the Corporations Act 2001,which has been given to the directors of Eureka Energy Limited, would be in the same terms if given to the directors as at the time of this auditor’s report. F

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Opinion

In our opinion: (a) the financial report of Eureka 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 2011

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 financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included in of the directors’ report for the year ended 30 June 2011. 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 Eureka Energy Limited for the year ended 30 June 2011 complies with section 300A of the Corporations Act 2001.

BDO Audit (WA) Pty Ltd

Peter TollDirector

Perth, Western Australia Dated this 30th day of September 2011

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Note

Consolidated

2011Restated (1)

2010

US $ ‘000 US $ ‘000

Revenue (6) 3,823 34

Other income (7) - 67

Total income 3,823 101

Royalties (932) -

Production and operating expense (412) -

Depreciation and amortisation expenses (8) (251) -

Corporate and technical management costs (573) (167)

Exploration and evaluation costs written off (8) - (83)

Corporate compliance costs (238) (78)

Office costs (238) (225)

Foreign exchange loss (379) -

(3,023) (553)

Profit / (loss) before income tax expense 800 (452)

Income tax (expense) / benefit (9) 300 -

Net Profit / (loss) attributable to members of the Company 1,100 (452)

Other comprehensive income

Exchange differences on translation of foreign operations 1,144 (291)

Total comprehensive income for the year attributable to members of the Company 2,244 (743)

Profit per share

Basic profit / (loss) per share (cents per share) (23) 0.5 (0.3)

Diluted profit / (loss) per share (cents per share) (23) 0.5 (0.3)

(1) With effect from 1 July 2010, the directors of Eureka Energy Ltd have elected to change its presentation currency from Australian Dollars to US Dollars.

Refer to note 2 for further details.

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the year ended 30 June 2011

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Note

2011Restated(1)

2010Restated (1)

2009

US $ ‘000 US $ ‘000 US $ ‘000

Assets

Current assets

Cash and cash equivalents (10) 8,163 1,060 314

Trade and other receivables (11) 1,036 7 16

Total current assets 9,199 1,067 330

Non-current assets

Oil and gas properties (producing) (12) 13,762 - -

Deferred exploration and evaluation expenditure (13) 9,239 7,644 6,711

Deferred tax asset (9) 300 - -

Property, plant and equipment (14) 182 - -

Total non-current assets 23,483 7,644 6,711

Total assets 32,682 8,711 7,041

Liabilities

Current liabilities

Trade and other payables (15) 1,290 131 208

Total liabilities 1,290 131 208

Net assets 31,392 8,580 6,833

Equity

Contributed equity (16) 35,711 15,143 12,653

Reserves (17) 2,252 1,108 1,399

Accumulated losses (17) (6,571) (7,671) (7,219)

Total equity 31,392 8,580 6,833

(1) With effect from 1 July 2010, the directors of Eureka Energy Ltd determined that the presentation currency of the company and its subsidiaries will be in US dollars. As such, in accordance with AASB 101.39, a third consolidated Statement of Financial Position and notes to the restated amounts have been

presented.

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAs at 30 June 2011

Consolidated

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Note

Consolidated

2011Restated (1)

2010

US $ ‘000 US $ ‘000

Cash flows from operating activities

Receipts from oil and gas sales 2,693 45

Payments to suppliers and employees (1,409) (657)

Net cash inflow (outflow) from operating activities (22) 1,284 (612)

Cash flows from investing activities

Payments for capitalised exploration and evaluation (14,103) (1,088)

Payments for property, plant & equipment (226) -

Interest received (6) 94 7

Net cash outflow from investing activities (14,235) (1,081)

Cash flows from financing activities

Proceeds from issues of shares (16b) 21,539 2,639

Share issue costs (16b) (1,106) (149)

Interest paid - (7)

Net cash inflow from financing activities 20,433 2,483

Net increase in cash and cash equivalents 7,482 790

Cash and cash equivalents at the beginning of the year 1,060 314

Effects of exchange rate changes on cash and cash equivalents (379) 44

Cash and cash equivalents at the end of the year (10) 8,163 1,060

(1) With effect from 1 July 2010, the directors of Eureka Energy Ltd determined that the presentation currency of the company and its subsidiaries will be in US dollars. As such, in accordance with AASB 101.39, a third consolidated Statement of Financial Position and notes to the restated amounts have been

presented.

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOWSFor the year ended 30 June 2011

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1. Corporate informationEureka Energy Limited (Company or Eureka) is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange.

The financial statements include the Consolidated Entity comprised by Eureka and its subsidiaries (Group or Consolidated Entity).

2. Summary of significant accounting policiesThe principal accounting policies adopted in the preparation of the financial statement are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

a) Basis of preparation

The financial statements are general-purpose financial statements, which have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Statement of compliance

The consolidated financial statements comply with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial statements of Eureka Energy Limited comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available-for-sale financial assets.

Changes in accounting policy and disclosures

Items included in the financial statements of the Group companies are measured using the currency of the primary economic environment in which each company operates (“the functional currency”). The functional currency of the Parent Company is Australian Dollars, however the functional currency of Company’s US subsidiaries is US dollars. Revenue from the US operations, which comprises 100% of revenue from continuing operations, is received in US dollars, and the majority of payments, including operating expenses, are also payable in US dollars.

Previously the Group’s presentational currency in the consolidated financial statements was Australian Dollars. To facilitate clarity and understanding, the Directors resolved to change the presentation currency and present the consolidated financial statements in US Dollars from 1 July 2010. This presentation is consistent with internal management reporting. The change has been applied retrospectively and comparatives restated.

Critical accounting estimates and significant judgements

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.

Going Concern

The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

The Group made a profit of US$1,100,000 for the year to 30 June 2011 (2010: loss of US$452,000) and had a net cash inflow from operations of US$7,482,000 for the year (2010: US$790,000).

New accounting standards and interpretations

The Group has chosen not to early-adopt any accounting standards that have been issued, but are not yet effective.

Set out below is a summary of issued accounting standards, which are or may become relevant to the Consolidated Entity, which are not yet effective and a description of their expected effect on the Group’s financial statements(if any).

NOTES TO THE FINANCIAL STATEMENTS

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AASB 2010-4 Amendments to Australian Accounting Standards – Financial Instruments: Disclosures [AASB 7] (effective 1 January 2011)

In June 2010 the AASB issued an amendment to AASB 7 Financial Instruments: Disclosures, which deletes various disclosures relating to credit risk, renegotiated loans and receivables and the fair value of collateral held. There will be no impact on initial adoption to amounts recognised in the financial statement as the amendments result in fewer disclosures only.

AASB 2010-4 Amendments to Australian Accounting Standards – Presentation of Financial Statements [AASB 101] (effective 1 January 2011)

In June 2010 the AASB issued an amendment to AASB 101 Presentation of Financial Statements, which allows that a detailed reconciliation of each item of other comprehensive income may be included in the statement of changes in equity or in the notes to the financial statements. There will be no impact on initial adoption of this amendment as a detailed reconciliation of each item of other comprehensive income has always been included in the statement of changes in equity.

Revised AASB 124 Related Party Disclosures and AASB 2009-12 Amendments to Australian Accounting Standards (effective from 1 January 2011)

In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for accounting years beginning on or after 1 January 2011 and must be applied retrospectively. The amendment removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities and clarifies and simplifies the definition of a related party. The Group will apply the amended standards from 1 July 2011. When the amendments are applied, the Group and the parent will need to disclose any transaction between its subsidiaries. However, it has yet to put systems in place to capture the necessary information. It is therefore not possible to disclose the financial impact, if any, of the amendment on the related party disclosures.

AASB 9 (issued December 2009) - Financial Instruments (Effective from 1 January 2013)

This amends the requirements for classification and measurement of financial asset. Due to the recent release of these amendments and that adoption is only mandatory for the 30 June 2014 year end, the entity has not yet made an assessment of the impact of these amendments.

IFRS 11 (issued May 2011) Joint Arrangements (Effective from Annual reporting years commencing on or after 1 January 2013)

Joint arrangements will be classified as either ‘joint operations’ (where parties with joint control have rights to assets and obligations for liabilities) or ‘joint ventures’ (where parties with joint control have rights to the net assets of the arrangement).

Joint arrangements structured as a separate vehicle will generally be treated as joint ventures and accounted for using the equity method (proportionate consolidation no longer allowed).

However, where terms of the contractual arrangement, or other facts and circumstances indicate that the parties have rights to assets and obligations for liabilities of the arrangement, rather than rights to net assets, the arrangement will be treated as a joint operation and joint venture parties will account for the assets, liabilities, revenues and expenses in accordance with the contract.

IFRS 12 Disclosure of interest in other entities (Effective from 1 Jan 2013)

Combines existing disclosures from IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures. Introduces new disclosure requirements for interests in associates and joint arrangements, as well as new requirements for unconsolidated structured entities.

IFRS 13 (issued May 2011) Fair Value Measurement (Effective from 1 Jan 2013)

Additional disclosures required for items measured at fair value in the statement of financial position, as well as items merely disclosed at fair value in the notes to the financial statements. Extensive additional disclosure requirements for items measured at fair value that are ‘level 3’ valuations in the fair value hierarchy that are not financial instruments, e.g. land and buildings, investment properties etc.

IFRS 10 (issued May 2011) Consolidated Financial Statements (Effective from Annual reporting years commencing on or after 1 January 2013)

Introduces a single ‘control model’ for all entities, including special purpose entities (SPEs), whereby all of the following conditions must be present:

- Power over investee (whether or not power used in practice) - Exposure, or rights, to variable returns from investee - Ability to use power over investee to affect the entity’s returns from investee.

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b) Principles of consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Eureka Energy Limited as at 30 June 2011 and the results of all the subsidiaries for the year then ended.

Subsidiaries are all those entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights.

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are eliminated unless the transaction provides evidence of the impairment of the assets transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company.

Joint operations

Jointly controlled assets

The Group’s proportionate interests in the assets, liabilities and expenses of the project have been incorporated in to the financial statements under the appropriate headings. Details of the joint operations are set out in note 25.

c) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors.

The Board of Directors review internal management reports on a monthly basis that is consistent with the information provided in the statement of comprehensive income, statement of financial position and statement of cash flows. As a result no reconciliation is required, because the information as presented is used by the Board of Directors to make strategic decisions.

Management has determined, based on the reports reviewed by the Board of Directors and used to make strategic decisions, that the Group has one reportable segment being oil & gas exploration and production in the United States of America. The Group’s management and administration office is located in Australia. There has been no other impact on the measurement of the company’s assets and liabilities. Comparative information has been restated.

d) Foreign currency translation

Functional and presentation currency

Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates (‘the functional currency’). The functional currency of the Parent Company is Australian dollars. The functional currency of the US subsidiaries is US dollars as revenue from the US operations, which comprises 100% of revenue from continuing operations, is received in US dollars. The majority of US subsidiaries payments, including operating expenses and income tax, are also payable in US dollars.

From July 1 2010, the Directors resolved to change the Group’s presentation currency for the consolidated financial statements from Australian dollars to US dollars. The change was implemented by translating the assets and liabilities of the US subsidiaries at spot rates at the date of the change and application of accounting for subsidiaries with a different functional currency being applied prospectively.

Translation and balances

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of the transactions.

Foreign currency monetary assets and liabilities at the reporting date are translated at the exchange rate existing at reporting date.

Exchange differences are recognised in the statement of comprehensive income in the period in which they arise.

NOTES TO THE FINANCIAL STATEMENTS (cont’d)

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Group companies

The results and financial position of all the Group companies that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement of financial position,

• income and expense for each statement of comprehensive income are translated at average exchange rates, and

• exchange differences arising on translation of intercompany payables and/or receivables of foreign operations, in a currency that is not the same as the parent’s functional currency, are recognised in the foreign currency translation reserve, as a separate component of equity. These differences are only recognised in the profit or loss upon disposal of the foreign operations.

e) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. The Group recognises revenue when the amount of revenue can be reliably measured and it is probable that future economic benefits will flow to the entity.

Oil & Gas Sales

Revenue from the sale of oil, gas and condensate produced is recognised when the Consolidated Entity has transferred to the buyer the significant risks and rewards of ownership of the products from the following product streams:

• Dry Gas – upon transfer into a third party’s sales pipeline;• Natural Gas Liquids – upon delivery to purchasers storage facility; and• Condensate – upon transfer of product to purchaser’s transportation facility.

Interest

Revenue is recognised as the interest accrued (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

f) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred tax

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

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.

Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Parent Entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the statement of comprehensive income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly

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in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

Tax consolidation

Effective 25 October 2005 Eureka Energy Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group with Eureka as the Head Entity.

Eureka and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its own right.

In addition to its own current and deferred tax amounts, Eureka also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

g) Business combinations

The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or business under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair value of assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured to fair value recognised in the statement of comprehensive income.

h) Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash- generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.

An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of comprehensive income, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.


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i) Cash and cash equivalents

For statement of cash flows presentation purposes, 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, and bank overdrafts.

j) Trade and other receivables

Trade receivables, which generally have 30-90 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment.

Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. 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. The amount of the impairment loss is recognised in the income statement within other expenses.

k) Financial assets

Investments in subsidiaries are measured at cost.

Other financial assets only consist of ‘loans and receivables’. The classification depends on the nature and purpose for which the financial assets were acquired and is determined at the time of initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

Recognition and derecognition

Purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through the statement of comprehensive income. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

Subsequent measurement

Loans and receivables are subsequently recorded at amortised cost, using the effective interest method, less impairment.

Impairment

The Consolidated Entity assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired.

If there is evidence of impairment for any of the Consolidated Entity’s financial assets carried at amortised cost, the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flow, excluding future credit losses that have not been incurred. The cash flows are discounted at the financial asset’s original effective interest rate. The loss is recognised in the statement of comprehensive income.

l) Property, plant and equipment (other than oil & gas properties)

Property, plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item.

Depreciation is provided on property, plant and equipment. Depreciation is calculated on a straight line basis so as to write down the net cost or fair value of each asset over its expected useful life to its estimated residual value.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

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The following estimated useful lives are used in the calculation of depreciation;

Computers and technical equipment 3 yearsFixtures and fittings 5 yearsPlant and equipment 10 - 20 years

m) Exploration, evaluation and restoration costs

Exploration and evaluation expenditure

Exploration and evaluation expenditure is stated at cost and is accumulated in respect of each identifiable area of interest.

Such costs are only carried forward in respect of areas of interest for which the rights of tenure are current and where:

• such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or

• activities in the area have not at the statement of financial position date reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active and significant operations in, or in relation to the area of interest are continuing.

All other costs which do not meet these criteria are written off immediately to the statement of comprehensive income.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Where carried forward expenditure does not satisfy the policy stated above it is written off to the statement of comprehensive income in the period in which the decision is made to write-off. Accumulated costs in relation to an abandoned area are written off to the statement of comprehensive income in the period in which the decision to abandon the area is made.

Prepaid drilling and completion costs

Where the Company has a non-operator interest in an oil or gas property, it may periodically be required to make a cash contribution for its share of the operator’s drilling and / or completion costs, in advance of these operations taking place.

Where these contributions relate to a prepayment for exploratory or early stage drilling activity, prior to a decision on the commerciality of a well having been made, the costs are capitalised as prepaid drilling costs within Exploration and Evaluation Expenditure.

Where these contributions relate to a prepayment for well completion, these costs are capitalised as prepaid completion costs within Exploration and Evaluation or Development Projects depending on whether a decision has already been made as to the commercial viability of the well.

As the operator notifies the Company as to how funds have been expended, the costs are reclassified from prepaid costs to Oil & Gas Properties – Tangible or Intangible costs as appropriate.

Transfer of capitalised exploration and evaluation expenditure to producing projects (oil & gas properties)

When a well comes into commercial production, accumulated exploration and evaluation for the relevant Area of Interest is transferred to producing projects and amortised on a units of production basis.

Producing projects

Producing projects are stated at cost less accumulated amortisation and impairment charges. Producing projects include construction, installation or completion of production and infrastructure facilities such as pipelines, transferred exploration and evaluation assets, development wells and the provision for restoration.

Amortisation and depreciation of producing projects

The Consolidated Entity uses the “units of production” (“UOP”) approach when amortising field-specific assets. Using this method of amortisation requires the Consolidated Entity to compare the actual volume of production to the reserves and then apply the rate of depletion to the carrying value of the asset.

Capitalised producing project costs relating to commercially producing wells are amortised using the UOP basis once commercial quantities are being produced within an area of interest. The reserves used in these calculations are the Proved plus Probable reserves and are reviewed at least annually.


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Rehabilitation, Restoration and Environmental Costs

Long-term environmental obligations are based on the Consolidated Entity’s environmental management plans, in compliance with current environmental and regulatory requirements.

The costs include obligations relating to reclamation, waste site closure, plant closure, and other costs associated with the restoration of the site.

Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has occurred up to the reporting date. Increases due to additional environmental disturbances are capitalised and amortised over the remaining lives of the wells. These increases are accounted for on a net present value basis.

Annual increases in the provision relating to the change in the net present value of the provision and inflationary increases are accounted for in earnings. To the extent that such increases stem from the unwinding of a discounting of the provision to its net present value, this is recognised as a financial expense.

The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not reduced by the potential proceeds from the sale of assets or from plant clean-up at closure.

Impairment

The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the cash generating unit level whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.

An impairment exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is written down to its recoverable amount. Any impairment losses are recognised in the statement of comprehensive income.

n) Trade and other payables

Trade payables and other accounts payable represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

o) Contributed equity

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 from the proceeds.

p) Earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, 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 year.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

q) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

• where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables, with the exception of accrued expenses and expense provisions, are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the ATO is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the ATO are classified as operating cash flows.

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r) Share-based payment transactions

Share-based compensation benefits are provided to employees where the Board considers that this provides a cost-effective and efficient means of remunerating and incentivising employees.

The fair value of the options granted is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at the grant date and recognised over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using a 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.

The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of options that are expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the statement of comprehensive income with a corresponding adjustment to equity.

s) Rounding of amounts

The Company is of a kind referred to in Class order 98/100, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with the Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

3. Financial risk management The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and commodity price risk), credit risk and liquidity risk. The Group’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 Group. The Group uses different methods to measure different types of risk to which it is exposed.

Eureka’s board of directors (Board) performs the duties of a risk management committee in identifying and evaluating sources of financial and other risks. The Board provides written principles for overall risk management which balance the potential adverse effects of financial risks on Eureka’s financial performance and position with the “upside” potential made possible by exposure to these risks and by taking into account the costs and expected benefits of the various methods available to manage them.

The Group holds the following financial instruments:

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Financial assets

Cash and cash equivalents 8,163 1,060

Trade and other receivables 1,036 7

9,199 1,067

Financial liabilities

Trade and other payables at amortised cost 1,290 131


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a) Market risk

i) Foreign exchange risk

Eureka Energy Limited is based in Australia, its shares are listed on the Australian Securities Exchange and the Group reports its financial performance and position in United States dollars (US$). The Group operates internationally, with the result being that the Group is to some extent exposed to foreign exchange risk arising from fluctuations in the A$ / US$ exchange rate.

As at reporting date, the Board has formed the view that it would not be beneficial for the Group to purchase forward contracts or other derivative financial instruments to hedge this foreign exchange risk. Factors which the Board considered in arriving at this position included the expense of purchasing such instruments and the inherent difficulties associated with forecasting the timing and quantum of US$ cash inflows and outflows at a time when the Group is still at the early stages of exploiting its oil and gas properties. The Board may reconsider its position with regard to hedging against foreign exchange risk in the future as the Group’s activities evolve and / or in response to industry or macro-economic factors.

The carrying amounts of the Group’s financial assets and liabilities are denominated in United States dollars except as set out below:

Consolidated

2011Restated

2010

US$ ‘000 equivalent US$ ‘000 equivalent

Financial assets

Australian $ Cash and cash equivalents 7,290 664

Trade and other receivables - -

7,290 664

Group sensitivity

Based on the financial instruments held at 30 June 2011, had the Australian dollar weakened or strengthened by 10% against the US dollar with all other variables held constant, the Group’s post tax profit for the year would have been US$ 663,000 lower / US$ 810,000 higher (2010 – US$ 60,000 lower / US$ 73,000 higher) as a result of foreign exchange gains or losses on translation of Australian dollar denominated financial instruments as detailed in the table above. Profit is more sensitive to movements in the Australian dollar / US dollar exchange rates in 2011 than in 2010 due to the increased amount of Australian dollar denominated financial instruments.

ii) Interest rate risk

As at and during the year ended on reporting date the Group had no significant interest-bearing assets or liabilities other than liquid funds on deposit. As such, the Group’s income and operating cash flows (other than interest income from funds on deposit) are substantially independent of changes in market interest rates. The Group’s exposure to interest rate risk and the effective weighted average interest rate for each class of financial assets and liabilities is set out below.

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Financial assets

Cash assets Floating rate* 8,163 1,060

* Weighted average effective interest rate 3.34% (2010: 1.68%)

The Group’s policy is to maximise the return on cash held through the use of high interest deposit accounts and term deposits where possible.

The assumptions used in the sensitivity analysis represent management’s assessment of the reasonably possible change in interest rates.

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Group sensitivity

At 30 June 2011, the Group’s exposure to interest movements is not material (2010 – not material) therefore no further analysis is required or provided.

iii) Commodity price risk

As a result of its operations the Group is exposed to commodity price risk arising due to fluctuations in the prices of natural gas, crude oil and other commodities. The demand for, and prices of, natural gas and crude oil are dependent on a variety of factors, including:

• Supply and demand;• The level of consumer product demand;• Weather conditions;• The price and availability of alternative fuels;• Actions taken by governments and international cartels; and• Global economic and political developments.

As at reporting date, the Board has formed the view that it would not be beneficial for the Group to purchase forward contracts or other derivative financial instruments to hedge this commodity price risk. Factors which the Board considered in arriving at this position included the expense of purchasing such instruments and the inherent difficulties associated with forecasting future production levels while the Consolidated Entity is primarily at the exploration stage of realising the value of its oil and gas assets. As development of these assets progresses and it becomes possible to forecast future production levels with a greater degree of certainty, the Board may reconsider its position with regard to hedging against commodity price risk in the future.

b) Credit risk

Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted. The Group trades only with recognised, trustworthy third parties. It is the Group’s policy to perform credit verification procedures in relation to any customers wishing to trade on credit terms with the Group. These include taking into account the customers’ financial position and any past experience to set individual risk limits as determined by the Board.

The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as summarised in part a) of this note.

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Cash at bank and short-term bank deposits

AA Rated 7,290 1,036

A Rated 873 24

8,163 1,060

c) Liquidity risk

Prudent liquidity risk management involves the maintenance of sufficient cash, committed credit facilities and access to capital markets. It is the policy of the Board to ensure that the Group is able to meet its financial obligations and maintain the flexibility to pursue attractive investment opportunities through keeping committed credit lines available where possible, ensuring the Group has sufficient working capital and preserving the 15% share issue limit available to the Company under the ASX Listing Rules. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows.

Contractual maturities of financial liabilities

As at the reporting date the Group had total financial liabilities of US$1,290,000 (2010: $131,000), comprised of non interest-bearing trade creditors and accruals with a maturity of less than 6 months.


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d) Fair value estimation

The fair value of financial assets and financial liabilities must be estimated for recognition and measurement and/or disclosure purposes.

The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.

e) Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the potential return to shareholders.

The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the parent.

None of the Group’s entities are subject to externally imposed capital requirements.

4. Critical accounting estimates and judgements In preparing this financial report the Group has been required to make certain estimates and assumptions concerning future occurrences. There is an inherent risk that the resulting accounting estimates will not equate exactly with actual events and results.

a) Significant accounting judgements

In the process of applying the Group's accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements:

Deferred tax assets

As profitability of the Australian Group in the near future cannot yet be reliably determined the deferred tax assets and liabilities (including those arising from losses) associated with the Australian Group have not been recognised.

As the US Group is expected to make taxable profits in the future the deferred tax assets and liabilities (including those arising from losses) have been recognised. The expected taxable profits are a result of a significant estimated increase in revenues from 2011 onwards. In prior years deferred tax assets and liabilities were not recognised.

Capitalisation of exploration and evaluation expenditure

The Group has capitalised significant exploration and evaluation expenditure on the basis either that this is expected to be recouped through future successful development (or alternatively sale) of the Areas of Interest concerned or on the basis that it is not yet possible to assess whether it will be recouped.

Functional currency of US-based subsidiary operations

The functional currency of US subsidiaries has changed. As from 1 July 2009 the functional currency was changed to USD, primarily because the trend in the source currency of the majority of US subsidiaries costs, from AUD to USD, was not considered temporary. Cash receipts from the US operations, which comprises 100% of revenue from continuing operations, is received in USD. The majority of US subsidiaries payments, including operating expenses and income tax, are also payable in USD.

b) Significant accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Impairment of assets

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale.

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Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, costs of drilling and production, production rates, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

As at 30 June 2011, the carrying value of oil & gas properties is US$ 23,001,000 (2010: US$ 7,644,000).

Reserves Estimates

Estimation of reported recoverable quantities of Proven and Probable reserves include judgemental assumptions regarding commodity prices, exchange rates, discount rates and production and transportation costs for future cash flows. It also requires interpretation of complex geological and geophysical models in order to make an assessment of size, shape, depth and quality of reservoirs and their anticipated recoveries. These factors used to estimate reserves may change from period to period.

Reserve estimates are used to calculate the amortisation of producing assets and therefore a change in reserve estimates impacts the carrying value of assets and the recognition of deferred tax assets due to the changes in expected future cash flows.

Amortisation

In relation to the amortisation of capitalised exploration and evaluation expenditure, the Consolidated Entity uses the units of production reserve depletion method to calculate amortisation. This method of amortisation necessitates the estimation of the oil and gas reserves over which the carrying value of the relevant assets will be expensed to the profit and loss account. The calculation of oil and gas reserves is extremely complex and requires management to make judgements about commodity prices, future production costs and geological structures. The nature of reserve estimation is such that reserves are not intended to be 100% accurate but rather provide a statistically probable outcome in relation to the economically recoverable reserve. As the actual reserve can only be accurately determined once production has ceased, amortisation expensed during the production may not on a year to year basis accurately reflect the actual percentage of reserve depleted. However, over the entire life of the producing assets all capitalised costs will be expensed to the statement of comprehensive income.

Depreciation of oil & gas properties

Property, plant and equipment related to oil and gas producing properties is stated at cost less accumulated depreciation. Depreciation is charged on a straight line basis over the expected useful life for each asset group. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation;

Property, plant and equipment 10 - 20 years

Restoration Provision

The Group estimates the future rehabilitation costs of production facilities, wells and pipelines at different stages of the development and construction of assets or facilities. In most instances, removal of assets occurs many years into the future. This requires judgemental assumptions regarding removal date, future environmental legislation, the extent of restoration activities and the future removal technology available and liability specific discount rates to determine the present value of these cash flows. As at 30 June 2011, restoration provisions have a carrying value of Nil (30 June 2010 : Nil)

Presentation currency

With effect from 1 July 2010, the Directors have elected to change the presentation currency of the Group from Australian dollars to US dollars.


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5. Segment information and judgements Management has determined that the Group has one reportable segment, being Oil & Gas Exploration, Development and Production. As the Group is focused on Oil & Gas Exploration, Development and Production, the Board monitors the Group based on actual versus budgeted revenues and expenditure incurred by area of interest. This internal reporting framework is the most relevant to assist the Board with making decisions regarding the Company and its ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed to date.

2011Restated

2010

US $ ‘000 US $ ‘000

Revenue from external sources 3,729 27

Reportable segment profit / (loss) 2,078 (110)

Reportable segment assets 25,066 7,732

Reconciliation of reportable segment profit or loss

Reportable segment profit / (loss) 2,078 (110)

Interest 94 7

Unallocated:

Corporate expenses (1,372) (349)

Profit / (loss) before tax 800 (452)

Income tax benefit 300 -

Profit / (loss) after tax 1,100 (452)

6. Revenue

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

From continuing operations

Sales revenue

Oil and gas sales 3,729 27

Other revenue

Interest 94 7

3,823 34 For

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7. Other income

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Net foreign exchange gain / (loss) - 67

8. Expenses

Profit before income tax includes the following specific expenses;

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Amortisation of oil & gas properties 208 -

Depreciation of property, plant & equipment 43 -

Exploration costs written off - 83


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9. Income Tax

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Current tax - -

Deferred tax benefit 300 -

300 -

a) Income tax expense

A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the Group's applicable income tax rate is as follows:

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Accounting loss before tax 800 (452)

Tax at the Australian statutory income tax rate of 30% (2010: 30%) 240 (136)

Tax effect of non deductible amounts:

Unrealised foreign exchange loss 114 -

Other 45 3

Tax effect of adjustments due to recognition of deferred tax assets/liabilities:

Other (790) -

Tax effect of timing differences in relation to unrecognised deferred tax assets / liabilities:

Other (4) (3)

Adjustment for differing tax rate (116)

(511) (136)

Less Australian tax losses not recognised 211 136

(300) -

b) Tax losses

Australian tax losses not recognised 3,139 (2,373)

Foreign tax losses not recognised - (6,403)

Foreign tax losses recognised 11,333 -

Potential tax benefit 14,472 (8,776)

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Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

c) Recognised deferred tax assets & liabilities

Deferred tax assets

Arising from temporary differences attributable to;

Foreign losses 3,400 -

Amortisation 898 -

Less set off of deferred tax liabilities (3,998) -

300 -

Deferred tax liabilities

Arising from temporary differences attributable to:

Depreciation (681) -

Intangible drilling cost (3,317) -

Less set off of deferred tax liabilities against deferred tax assets 3,998 -

- -

d) Unrecognised deferred tax assets & liabilities

Deferred tax assets

Tax losses 942 712

Foreign losses - 1,921

Other 5 9

Deferred tax liabilities

Exploration expenditure - (764)

Fair value adjustment to oil & gas properties - (517)

947 1,361

The income tax rate applicable to the US Group is 35%. The corporate income tax rate for Australia is 30%. As such, an adjustment for differing tax rate has been made for all tax amounts related to the US Group.

Australian revenue tax losses may be carried forward indefinitely to offset against future Australian taxable profits, subject to meeting relevant statutory requirements. US revenue tax losses are available for up to 20 years to offset future taxable profits.

As profitability of the Australian Group in the near future cannot yet be reliably determined the deferred tax assets and liabilities (including those arising from losses) associated with the Australian Group have not been recognised.


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As the US Group is expected to make taxable profits in the future the deferred tax assets and liabilities (including those arising from losses) have been recognised. The expected taxable profits are a result of a significant estimated increase in revenues from 2011 onwards. In prior years deferred tax assets and liabilities were not recognised.

Effective 25 October 2005, Eureka Energy Ltd and its 100% owned Australian resident subsidiaries formed a tax consolidated group. Eureka Energy Limited is the head entity of the tax consolidated group. Members of the group are intending to enter a tax sharing arrangement that provides for the allocation of income tax liabilities between the entities should the head entity default on its tax obligations. As at the balance date, the possibility of default is remote.

Members of the tax consolidated group have not entered into a tax funding agreement and consequently no compensation is receivable or payable for any deferred tax asset or current tax payable/(receivable) assumed by the head entity.

10. Current assets – cash and cash equivalents

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Cash at bank and in hand 8,163 1,060

a) Fair value

The carrying amount of cash and cash equivalents is a reasonable approximation of fair value.

b) Interest rate risk exposure

Information about the Group’s exposure to interest rate risk in relation to cash and cash equivalents is provided in note 3.

11. Current assets – trade and other receivables

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Other 1,036 7

a) Fair value

Due to the short-term nature of these receivables, their carrying value is assumed to approximate fair value. No group trade receivables were past due or impaired at reporting date and there is no indication that amounts recognised as trade and other receivables will not be recovered in the normal course of business. The company policy on credit risk is disclosed at note 3 to the accounts.

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12. Oil & Gas Properties - producing

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

At cost

Transfer from exploration 13,970 -

Accumulated amortisation (208) -

Closing balance 13,762 -

Capitalised costs relating to the Company’s interest in the Sugarloaf project were transferred to producing properties at the end of the period.

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Producing projects

Tangible assets 1,634 -

Intangible assets 12,336 -

Total at cost value 13,970 -

13. Deferred exploration and evaluation expenditure

Consolidated

2011Restated

2010

US $ ‘000 US $’000

At cost

Opening balance 7,644 6,711

Additions 15,775 933

Transfer to producing (13,970) -

Transfer to property, plant & equipment (210) -

Closing balance 9,239 7,644

The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful development and exploitation, or alternatively sale of the respective area of interest.


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14. Property, plant and equipment

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Opening value - -

Additions 15 -

Transfer from deferred exploration 210 -

Accumulated depreciation (43) -

Closing balance 182 -

15. Current liabilities – Trade and other payables

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Trade payables 703 126

Other payables 587 5

1,290 131

The average credit period on purchases is 45 days from the date of invoice. Group policy is to pay all undisputed invoices within 30 days from the month of receipt.

a) Fair value

The carrying amount of trade payables is a reasonable approximation of fair vale due to their short-term nature.

b) Foreign exchange risk exposure

Information about the Group’s exposure to foreign exchange risk is provided in note 3.

16. Contributed Equitya) Share capital

Consolidated and Parent

2011 2010 2011Restated

2010

Number Number US $ ‘000 US $ ‘000

Share capital

Fully paid ordinary shares 237,014,050 154,296,187 35,711 15,143 For

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b) Movements in ordinary share capital

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. On a show of hands every holder of ordinary shares present at a meeting or by proxy, is entitled to one vote. Upon a poll every holder is entitled to one vote per share held.

Description Date Number of shares

Issue Price

US $ ‘000US Cents

2010 Opening balance (restated) 1 Jul 09 115,003,875 12,653

Share placement 16 Oct 09 17,250,000 0.035 603

Rights Issue 16 Apr 10 22,042,312 0.092 2,036

Less: transaction costs - (149)

2011 Opening balance (restated) 1 Jul 10 154,296,187 15,143

Rights Issue (i) 17 Aug 10 25,716,031 0.15 3,938

Allotment (ii) 24 Aug 10 900,000 0.15 135

Share placement (iii) 10 Nov 10 26,101,832 0.25 6,439

Share placement (iv) 6 Apr 11 30,000,000 0.37 11,162

Less: transaction costs - (1,106)

Closing balance 30 Jun 11 237,014,050 35,711

(i) Rights Issue

On 17 August 2010 Eureka announced a fully-underwritten 1:6 entitlements offer at an issue price of AUD 15 cents per share to raise approximately US $3.9 million before costs from the issue of 25,716,031 new fully paid ordinary shares.

(ii) Allotment

On 24 August 2010 Eureka announced the issue of 900,000 ordinary shares as part-consideration upon exercise of an option to acquire leases in the Eagle Ford area of Fayette County.

(iii) Share Placement

On 10 November 2010 Eureka announced the placement of 26,101,832 new fully paid ordinary shares at an issue price of AUD 25 cents per share to raise US $6.4 million before costs.

(iv) Share Placement

On 6 April 2011 Eureka announced the placement of 30 million new fully paid ordinary shares at an issue price of AUD 36 cents per share to raise US $11.1 million before costs.

The Group policy regarding capital risk management is disclosed at Note 3.


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17. Reserves and accumulated lossesWith respect to the payment of dividends (if any) by Eureka Energy in subsequent financial years, no franking credits are currently available, or are likely to become available in the next 12 months.

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

(a) Option premium reserve

Opening balance 314 314

Balance at 30 June 314 314

The option premium reserve is used to record the proceeds received as consideration for options granted during the year.

(b) Share based payment reserve


Balance at 30 June 102 102

The share based payment reserve is used to record the fair value of equity instruments granted (refer to note 2 (r)).

Share based payment

Eureka does not have a formal employee share option plan however the Board has, from time to time granted options to consultants, employees and officers on a discretionary basis where it is considered that this provides a cost-effective and efficient means of remunerating and incentivising employees. In addition, shareholders have, in general meeting, approved the grant of incentive options to Directors. The share-based payment expenses recognised in prior years have been recognised in respect of the fair value of options granted as remuneration.

The fair value of options granted was calculated using the Binomial Option Pricing Model. The expense has been apportioned pro-rata to reporting periods where vesting periods apply.

No options were granted as remuneration during the year to 30 June 2011 (2010: none).

(c) Foreign currency translation reserve


Arising during year 1,144 (291)

Balance at 30 June 1,836 692

Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive income as described in note 2 (d) and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.

(d) Accumulated losses

Opening balance (7,671) (7,219)

Net profit / (loss) for the year 1,100 (452)

Balance at 30 June (6,571) (7,671)

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18. OptionsAs at reporting date, the Company and Consolidated Entity has no options on issue:

Movements in the number of options on issue during the year are as follows:

Description2011

Number2010

Number

Unlisted options

Opening balance - 1,000,000

Expired during the year - (1,000,000)

Balance at 30 June - -

19. Parent entity disclosuresThe following details information related to the parent entity, Eureka Energy Limited, at 30 June 2011. The information presented here has been prepared using accounting policies consistent with those presented in Note 2.

Company

2011Restated

2010Restated

2009

US $ ‘000 US $ ‘000 US $ ‘000

Current assets 7,289 1,043 291

Non-current assets 23,272 8,103 6,751

Total assets 30,561 9,146 7,042

Current liabilities 106 131 209

Non-current liabilities - - -

Total liabilities 106 131 209

Contributed equity 35,711 15,143 12,653

Reserves 3,694 416 416

Accumulated losses (8,950) (6,544) (6,236)

Total equity 30,455 9,015 6,833

(Loss) for the year (1,278) (447) (3,606)

Other comprehensive income for the year - - -

Total comprehensive (loss) for the year (1,278) (447) (3,606)


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a) Wholly-owned group

Details of interests in wholly-owned controlled entities are set out at part (b) of this note. Details of dealings with controlled entities are as follows:

Inter-company Account

Eureka provides working capital to its controlled entities. Transactions between Eureka and other controlled entities in the wholly owned Group during the year ended 30 June 2011 consisted of:

• Working capital advanced by Eureka Energy Limited;• Provision of services by Eureka Energy Limited; and• Expenses paid by Eureka Energy Limited on behalf of its controlled entities.

At reporting date amounts receivable from controlled entities (at carrying value, net of impairment writedowns) totalled US$20,777,000 (2010: US$3,752,000).

b) Investments in controlled entities

Name of Entity Country of Incorporation Class of Shares

Equity Holding

%

Hosston Holdings Pty Ltd Australia Ordinary 100

Kiana Projects Pty Ltd Australia Ordinary 100

Hosston Oil and Gas, Inc USA Ordinary 100

Hosston Oil and Gas Limited, LLC USA Ordinary 100

Hosston Oil and Gas General, LLC USA Ordinary 100

Hosston Oil and Gas, LP USA Ordinary 100

EKA 002, Inc USA Ordinary 100

EKA 003, Inc USA Ordinary 100

c) Ultimate parent company

The ultimate parent company in the wholly-owned Group is Eureka Energy Limited, a company incorporated in Australia.

20. Key Management Personnel (“KMP”) disclosuresThe Directors of Eureka Energy Limited during the year were:

Mr Ian McCubbing - Appointed 5 July 2010

Mr Peter Mills - Appointed 19 October 2010

Mr Mark Wilson - Appointed 5 July 2010

Mr Alex Neuling - Appointed 17 September 2010 (resigned 19 October 2010)

Mr Graham Dowland - Chairman (resigned 5 July 2010)

Mr Michael Price - Independent non-executive director (resigned 17 Sep 2010)

Mr Timothy Grice - Independent non-executive director (resigned 5 July 2010)

The current Company Secretary, Mr Alex Neuling, and former Company Secretary Julie Foster (resigned 5 July 2010) are also deemed Company executives under s9 of the Corporations Act 2001.

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a) Key Management Personnel compensation

Consolidated

2011Restated

2010

US $ ‘000 US $ ‘000

Short term employee benefits 345 155

Post-employment benefits 12 5

357 160

b) Equity instrument disclosures relating to KMP

Shares and option holdings

The numbers of shares and options over ordinary shares in the Company held during the financial year by each director of Eureka Energy Limited and other KMP of the Group, including their personally related parties, are set out below.

viii) KMP Share holdings

2011Balance at

start of year*Purchased as

investorsNet other change (i)

Balance at end of year*

Directors of Eureka Energy Ltd

G. Dowland (resigned 5 July 2010) 1,499,168 - 1,499,168 -

M.Price (resigned 17 September 2010) 707,779 - 707,779 -

T. Grice (resigned 5 July 2010) - - - -

I. McCubbing (appointed 5 July 2010) 2,566,667 1,073,612 - 3,640,279

P.Mills (appointed 19 October 2010) - - - -

M.Wilson (appointed 5 July 2010) 2,050,000 2,108,334 - 4,158,334

A.Neuling (appointed 17 September 2010, resigned 19 October 2010) 338,333 58,221 - 396,554

Executives

J. Foster (resigned 5 July 2010) - - - -

2010


G. Dowland 1,285,000 214,168 - 1,499,168

M. Price 606,667 101,112 - 707,779

T. Grice - - - -

Executives

J. Foster - - - -

*or when appointed / resigned

(i) Note balance at date of resignation as a director.


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Option holdings

2011Balance at

start of year*

Granted during the year as

remuneration

Exercised during the

yearNet other

changeBalance at

end of year*


I. McCubbing - - - - -

P. Mills - - - - -

M. Wilson - - - - -

G. Dowland - - - - -

M. Price - - - - -

T. Grice - - - - -

Executive

A. Neuling - - - - -

2010


G. Dowland 350,000 - - (350,000) -

M. Price 250,000 - - (250,000) -

T. Grice - - - - -

Executive

J. Foster - - - - -

*or when appointed / resigned

2011 Vested and exercisable Unvested

Directors of Eureka Energy Limited

I. McCubbing - -

P.Mills - -

M. Wilson - -

- -

2010

Directors of Eureka Energy Limited

G. Dowland - -

M. Price - -

T. Grice (appointed 8 May 2009) - -

- -

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c) Loans to key management personnel

There were no loans made to Directors of Eureka Energy Limited or other KMP of the Group (or their personally related entities) during the current or previous financial year.

d) Other transactions with KMP

Consolidated

2011Restated

2010

US $’000 US $’000

Payments to director-related parties 125 77

During the year, Erasmus Consulting Pty Ltd, a company of which Alex Neuling is a director, provided Company Secretarial, accounting and administration services to the Company, including services provided by Alex Neuling and other members of staff employed or retained by Erasmus Consulting Pty Ltd. For the year ended 30 June 2011, the Company paid US$111,562 to Erasmus Consulting Pty Ltd and this has been recognised in the financial statements as an expense.

During the year, the Company paid US$13,154 (2010: US$72,272) to Epicure Administration Pty Ltd, a company of which Michael Price is a Director. Epicure Administration Pty Ltd provided serviced office facilities to the Company and the payments have been recognised in the financial statements as an expense.

All of the above transactions were on normal commercial terms.

21. Remuneration of auditorsDuring the year the following fees were paid or payable for services provided by the auditor of the Group, its related practices and non-related audit firms:

Consolidated

2011Restated

2010

US $’000 US $’000

BDO Audit (WA) Pty Ltd for:

- an audit or review of financial reports and other audit work under the Corporations Act 2001 43 32

Total remuneration for audit services 43 32


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22. Reconciliation of profit after tax to net cash inflow from operating activities

Consolidated

2011Restated

2010

$ ‘000 $ ‘000

Profit (Loss) for the year 1,100 (452)

Adjustment for:

Interest received (94) (7)

Interest paid - 7

Depreciation and Amortisation 251 -

Unrealised foreign exchange (gains) / losses 1,524 (92)

Increase /(decrease) in current liabilities (168) (77)

Decrease / (increase) in trade and other receivables (1,029) 9

Deferred tax asset recognised (300) -

Net cash inflow from operating activities 1,284 (612)

23. Profit per share

Consolidated

2011Restated

2010

US Cents US Cents

Basic earnings per share

Profit / (Loss) attributable to the ordinary equity holders of the company 0.5 (0.3)

US $ ‘000 US $ ‘000

Profit / (Loss) used in calculation of basic / diluted loss per share

Profit / (Loss) 1,100 (452)

Weighted average number of ordinary shares used as the denominator in calculating basic / diluted profit per share 200,685,775 131,724,818F

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24. Subsequent eventsBoard changes

On July 1 2011, the Company announced the appointment of Mr Peter Mills as Managing Director and Chief Executive Officer. Mr Mills was originally appointed as a Non-Executive Director on October 19, 2010.

Pan de Azucar Initial Production

On 10th August 2011, the Company announced that initial production results for the BlackJack Springs #1H well at its Pan de Azucar Eagle Ford Shale Asset. The well averaged 460 boe/d of production over the initial 10 day production period.

Issue of Options

On 18 August 2011, the Company issued of 2,250,000 unlisted incentive share options, pursuant to shareholder approval of the Eureka Incentive Option Scheme.

25. Jointly controlled assetsAt reporting date, Eureka has a 6.25% (on a post-farmout basis) non-operating working interest in a joint operating agreement covering the Sugarloaf Gas and Condensate project in Texas, USA. The working interest denotes the percentage share of costs to be borne by the Group in drilling the initial wells on the project and differs from the net revenue interests to be derived from the project which is subject to various clauses in the relevant acquisition and operating agreements.

The total carrying value of Eureka’s interest in assets held by this jointly controlled project is US$13,762,000 (2010: US$7,644,000).

During the year, Eureka entered into a second joint operating agreement in order to develop the Pan de Azucar asset. At reporting date, Eureka holds a 9.4% non-operating interest in the BlackJack Springs #1 well and the percentage share denotes the share of costs payable by the group in order to drill and develop this well.

At reporting date, the carrying value of Eureka’s interest in this jointly controlled asset is US$1,288,000 (2010: nil).

26. Commitments & contingenciesThe Group had no contingent assets or liabilities at reporting date.

As at reporting date management estimates that the Group is contracted to contribute approximately US$3,250,000 towards the completion costs of wells spudded or approved prior to reporting date (2010: nil).

27. Related party transactionsThere have been no transactions with related parties during the period ended 30 June 2011 other than as disclosed elsewhere in the financial report.

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The Directors declare that:

(a) in the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;

(b) The financial statements and accompanying notes are prepared in compliance with International Financial Reporting Standards and interpretations adopted by the International Accounting Standards Board;

(c) the remuneration disclosures included on pages 14 to 17 of the Directors’ Report (as part of the audited Remuneration Report), for the year ended 30 June 2011 comply with section 300A of the Corporations Regulations 2001;

(d) in the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Consolidated Entity; and

(e) the Directors have been given the declarations required by s.295A of the Corporations Act 2001.

Signed in accordance with a resolution of the Directors made pursuant to s.295(5) of the Corporations Act 2001.


Perth30 September 2011

DIRECTORS’ DECLARATION

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CORPORATE GOVERNANCE STATEMENT

Approach to Corporate GovernanceEureka Energy Limited (Company) has adopted systems of control and accountability as the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this statement. Commensurate with the spirit of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 2nd edition (Principles & Recommendations), the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance practices. Where the Company's corporate governance practices follow a recommendation, the Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the "if not, why not" regime, where, after due consideration, the Company's corporate governance practices depart from a recommendation, the Board has offered full disclosure and an explanation for the adoption of its own practice.

Further information about the Company's corporate governance practices may be found on the Company's website at www.eurekaenergy.com.au, under the section marked "Corporate – Corporate Governance".

The Company reports below on how it has followed (or otherwise departed from) each of the Principles & Recommendations during the 2010/2011 financial year (Reporting Period). The Principles & Recommendations were amended in 2010, and these amendments apply to the Company's first financial year commencing on or after 1 January 2011. Accordingly, disclosure against the Principles & Recommendations as amended in 2010 will be made in relation to the Company's financial year ending 30 June 2012. The report below is made against the Principles & Recommendations prior to their amendment in 2010. The Company has made a partial early transition to the amended Principles & Recommendations by adopting a Diversity Policy, a summary of which is available on the Company’s website.

BoardRoles and responsibilities of the Board and Senior Executives(Recommendations: 1.1, 1.3)

The Company has established the functions reserved to the Board, and those delegated to senior executives and has set out these functions in its Board Charter.

The Board is collectively responsible for promoting the success of the Company through its key functions of overseeing the management of the Company, providing overall corporate governance of the Company, monitoring the financial performance of the Company, engaging appropriate management commensurate with the Company's structure and objectives, involvement in the development of corporate strategy and performance objectives, and reviewing, ratifying and monitoring systems of risk management and internal control, codes of conduct and legal compliance.

Senior executives are responsible for supporting the Chief Executive Officer and assisting the Chief Executive Officer in implementing the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board. Senior executives are responsible for reporting all matters which fall within the Company's materiality thresholds at first instance to the Chief Executive Officer or, if the matter concerns the Chief Executive Officer, directly to the Chair or the lead independent director, as appropriate.

The Company's Board Charter is available on the Company's website.

Skills, experience, expertise and period of office of each Director(Recommendation: 2.6)

A profile of each Director setting out their skills, experience, expertise and period of office is set out in the Directors' Report.

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Director independence(Recommendations: 2.1, 2.2, 2.3, 2.6)

The Board underwent a number of changes during the Reporting Period. The independent and non-independent directors on the Board during the Reporting Period are set out in the following table:

Dates Independent Non-Independent

01/07/10 – 04/07/10 Michael PriceTim Grice

Graham Dowland (Chair)

05/07/10 – 16/09/10 Michael PriceMark WilsonIan McCubbing (Chair)

17/09/10 – 18/10/10 Mark WilsonIan McCubbing (Chair)

Alex Neuling

19/10/10 – 30/06/11 Mark WilsonIan McCubbing (Chair)Peter Mills*

* On July 1 2011, Mr Mills was appointed Managing Director and Chief Executive Officer of the Company and from that date became a Non-Independent Director.

The Board considers the independence of directors having regard to the relationships listed in Box 2.1 of the Principles & Recommendations and the Company's materiality thresholds. The Board has agreed on, and set out in its Board Charter, the following guidelines for assessing the materiality of matters:

• Balance sheet items are material if they have a value of more than 10% of pro-forma net asset.

• Profit and loss items are material if they will have an impact on the current year operating result of 10% or more.

• Items are also material if they impact on the reputation of the Company, involve a breach of legislation, are outside the ordinary course of business, could affect the Company’s rights to its assets, if accumulated would trigger the quantitative tests, involve a contingent liability that would have a probable effect of 10% or more on balance sheet or profit and loss items, or will have an effect on operations which is likely to result in an increase or decrease in net income or dividend distribution of more than 10%.

• Contracts will be considered material if they are outside the ordinary course of business, contain exceptionally onerous provisions in the opinion of the Board, impact on income or distribution in excess of the quantitative tests, there is a likelihood that either party will default, and the default may trigger any of the quantitative or qualitative tests, are essential to the activities of the Company or cannot be replaced without an increase in cost which triggers any of the quantitative tests, contain or trigger change of control provisions, they are between or for the benefit of related parties, or otherwise trigger the quantitative tests.

Mr Dowland was Chief Executive Officer and Chair until his retirement on 5 July 2010. The Board considered that Mr Dowland’s extensive experience as both director and chair of various listed companies made him the most qualified Board member for both roles of Chief Executive Officer and Chair. Since Mr Dowland’s retirement on 5 July 2010, Mr McCubbing has been Chair. Mr McCubbing's experience makes him the most suitable person to chair the current Board. Mr Wilson has been appointed as lead independent director by the Board to assume the role of chair in situations where Mr McCubbing is unable to act as Chair.

As noted above, for a period of four days at the beginning of the Reporting Period, the Chair was an executive of the Company and carried out the dual role of Chair and Chief Executive Officer. Following Mr Dowling’s resignation and up until the end of the reporting period, the Company did not have a Chief Executive Officer and the responsibilities of this role were shared between the board members.

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Independent professional advice(Recommendation: 2.6)

To assist directors with independent judgement, it is the Board's policy that if a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of their office as a director then, provided the director first obtains approval from the Chair for incurring such expense, the Company will pay the reasonable expenses associated with obtaining such advice.

Selection and (Re) Appointment of Directors(Recommendation: 2.6)

In determining candidates for the Board, the Nomination Committee (or equivalent) follows a prescribed process whereby it evaluates the mix of skills, experience and expertise of the existing Board. In particular, the Nomination Committee (or equivalent) is to identify the particular skills that will best increase the Board's effectiveness. Consideration is also given to the balance of independent directors. Potential candidates are identified and, if relevant, the Nomination Committee (or equivalent) recommends an appropriate candidate for appointment to the Board. Any appointment made by the Board is subject to ratification by shareholders at the next general meeting.

The Board recognises that Board renewal is critical to performance and the impact of Board tenure on succession planning. Each director other than the Managing Director, must not hold office (without re-election) past the third annual general meeting of the Company following the director's appointment or three years following that director's last election or appointment (whichever is the longer). However, a director appointed to fill a casual vacancy or as an addition to the Board must not hold office (without re-election) past the next annual general meeting of the Company. At each annual general meeting a minimum of one director or one third of the total number of directors must resign. A director who retires at an annual general meeting is eligible for re-election at that meeting and the re-appointment of directors is not automatic.

The Company's Policy and Procedure for the Selection and (Re) Appointment of Directors is available on the Company's website.

Board committeesNomination Committee(Recommendations: 2.4, 2.6)

The Board has not established a separate Nomination Committee. Given the current size and composition of the Board, the Board believes that there would be no efficiencies gained by establishing a separate Nomination Committee. Accordingly, the Board performs the role of the Nomination Committee in accordance with the Nomination Committee Charter which describes the role, composition, functions and responsibilities of the Nomination Committee. The Board deals with any conflicts of interest that may occur when considering Nomination Committee business by ensuring that the director with conflicting interests is not party to the relevant discussions.

The Company's Nomination Committee Charter is available on the Company's website.

Audit Committee(Recommendations: 4.1, 4.2, 4.3, 4.4)

During the Reporting Period, the Board established a separate Audit Committee, which was not in place for the full reporting period, and therefore it was not structured in accordance with Recommendation 4.2. The Board dealt with any conflicts of interest when convening in its capacity as Audit Committee by ensuring that the director with conflicting interests was not party to the relevant discussions. The Board has established an Audit Committee which currently consists of Ian McCubbing and Mark Wilson. Mr Wilson acts as chairman of the audit committee.

The Audit Committee, held one meeting during the Reporting Period. Details of attendance at the Audit Committee meetings are set out in the Directors’ Report. The Company has adopted an Audit Committee Charter which describes the role, composition, functions and responsibilities of the Audit Committee.

Details of each of the director's qualifications are set out in the Directors' Report.

The Company has established procedures for the selection, appointment and rotation of its external auditor. The Board is responsible for the initial appointment of the external auditor and the appointment of a new external auditor when any vacancy arises, as recommended by the Audit Committee (or its equivalent). Candidates for the position of external auditor must demonstrate complete independence from the Company through the engagement period. The Board may otherwise select an external auditor based on criteria relevant to the Company's business and circumstances. The performance of

CORPORATE GOVERNANCE STATEMENT (cont’d)

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the external auditor is reviewed on an annual basis by the Audit Committee (or its equivalent) and any recommendations are made to the Board.

The Company's Audit Committee Charter and the Company's Procedure for Selection, Appointment and Rotation of External Auditor are available on the Company's website.

Remuneration Committee(Recommendations: 8.1, 8.2, 8.3)

During the Reporting Period, the Board established a separate Remuneration Committee comprising Ian McCubbing and Mark Wilson however a separate Remuneration Committee was not in place for the full year. Prior to the establishment of the Remuneration Committee, the Board believed that there were no efficiencies to be gained by establishing a separate Remuneration Committee. Accordingly, the Board performed the role of Remuneration Committee. Items that were usually required to be discussed by a remuneration committee were marked as separate agenda items at Board meetings when required. When the Board convened as the Remuneration Committee it carried out those functions which are delegated to it in the Company’s Remuneration Committee Charter. The Board dealt with any conflicts of interest by ensuring that the director with conflicting interests was not party to the relevant discussions.

The Remuneration Committee, having been established during the reporting period, did not hold a meeting during the Reporting Period and Remuneration Committee matters during the period were considered by the full board.

Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration Report” which forms of part of the Directors’ Report. Non-executive directors are remunerated at a fixed fee for time, commitment and responsibilities. Remuneration for non-executive directors is not linked to individual performance. From time to time the Company may grant options to non-executive directors. The grant of options is designed to recognise and reward efforts as well as to provide non-executive directors with additional incentives to continue those efforts for the benefit of the Company.

Pay and rewards for executive directors and senior executives consists of a base salary and performance incentives. Long term performance incentives may include options granted at the discretion of the Board and subject to obtaining the relevant approvals. Executives are offered a competitive level of base pay at market rates and are reviewed annually to ensure market competitiveness.

There are no termination or retirement benefits for non-executive directors (other than for superannuation).

The Company's Remuneration Committee Charter includes a statement of the Company's policy on prohibiting transactions in associated products which limit the risk of participating in unvested entitlements under any equity based remuneration schemes.

The Company's Remuneration Committee Charter is available on the Company's website.

Performance evaluationSenior executives(Recommendations: 1.2, 1.3)

The Board is responsible for evaluating the performance of senior executives. The Board evaluates the senior executives through informal discussions between the Chair and senior executives on an ad hoc basis.

During the Reporting Period, an evaluation of senior executives did not occur.

Board, its committees and individual directors(Recommendations: 2.5, 2.6)

The Chair is responsible for the evaluation of the Board and, when deemed appropriate, the Board committees and individual directors. The Nomination Committee is responsible for evaluating the Executive Chair or Chief Executive Officer, as applicable. These evaluations are conducted through informal means and undertaken as required.

During the Reporting Period, no formal performance evaluation of the Board and its members was carried out. It was not considered to be a beneficial procedure given the size and composition of the Board and the nature of the Company's operations which allow the directors to regularly discuss board performance. However, the composition of the Board and its suitability to carry out the Company's objectives is discussed on an ongoing basis and any adjustments are made accordingly, as occurred during the Reporting Period.

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Ethical and responsible decision makingCode of Conduct(Recommendations: 3.1, 3.3)

The Company has established a Code of Conduct as to the practices necessary to maintain confidence in the Company's integrity, the practices necessary to take into account its legal obligations and the reasonable expectations of their stakeholders, and the responsibility and accountability of individuals for reporting and investigating reports of unethical practices.

The Company's Code of Conduct is available on the Company website.

Policy for Trading in Company Securities(Recommendations: 3.2, 3.3)

The Company has established a Policy for Trading in Company Securities by directors, officers, employees and consultants, and all of their associates.

A copy of the Company's Policy for Trading in Company Securities is available on the Company's website.

Continuous Disclosure(Recommendations: 5.1, 5.2)

The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule disclosure requirements and accountability at a senior executive level for that compliance.

The Company's Policy on Continuous Disclosure and a summary of its Compliance Procedures are available on the Company's website.

Shareholder Communication(Recommendations: 6.1, 6.2)

The Company has designed a communications policy for promoting effective communication with shareholders and encouraging shareholder participation at general meetings.

The Company's Shareholder Communication Policy is available on the Company's website.

Risk Management(Recommendations: 7.1, 7.2, 7.3, 7.4)

The Board has adopted a Risk Management Policy, which sets out the Company's risk profile. Under the policy, the Board is responsible for approving the Company's policies on risk oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control.

Under the policy, the Board delegates day-to-day management of risk to the Chief Executive Officer, who is responsible for identifying, assessing, monitoring and managing risks. The Chief Executive Officer is also responsible for updating the Company's material business risks to reflect any material changes, with the approval of the Board.

In fulfilling the duties of risk management, the Chief Executive Officer may have unrestricted access to Company employees, contractors and records and may obtain independent expert advice on any matter they believe appropriate, with the prior approval of the Board.

In addition, the following risk management measures have been adopted by the Board to manage the Company's material business risks:

• the Board has established authority limits for management, which, if proposed to be exceeded, requires prior Board approval;

• the Board has adopted a compliance procedure for the purpose of ensuring compliance with the Company's continuous disclosure obligations; and

• the Board has adopted a corporate governance manual which contains other policies to assist the Company to establish and maintain its governance practices.

CORPORATE GOVERNANCE STATEMENT (cont’d)

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A risk register has been compiled in conjunction with the full Board, the Company Secretary and senior executives which identifies all material business risks. The potential consequences and likelihood of each material business risk occurring is also documented in the risk register together with the existing controls in place to effectively mitigate the risk and any further actions required to manage the risk.

The risk register is reviewed regularly by the Board and senior executives and updated when and where necessary. An action plan is to be developed for any additional risk identified that exceed the tolerance level set by the Board. Any critical risks identified during the process are to be assigned to risk owners. Risk management is a standing agenda item at each Board meeting.

Risk areas which are regularly considered include the following:

• Market-related – including demand, commodity prices, exchange rates

• Financial reporting

• Liquidity and funding

• Operational – including Partner / Contractor / Operator risk

• Strategic

• Technical – including Exploration, Appraisal, Development, Production

• Project concentration

• Reputation

• Legal and compliance – including Documentation, Title, Governance, ASX requirements.

• Environmental and Nature

The Board has required management to design, implement and maintain risk management and internal control systems to manage the Company's material business risks. The Board also requires management to report to it confirming that those risks are being managed effectively for each Board meeting. The Board has received reports from management as to the effectiveness of the Company's management of its material business risks during the Reporting Period.

The Chief Executive Officer and the Chief Financial Officer (or equivalent) have provided a declaration to the Board in accordance with section 295A of the Corporations Act and have assured the Board that such declaration 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 risk.

The Company's Risk Management Policy is available on the Company's website.

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The shareholder information set out below was applicable as at 7 October 2011.

1. Twenty largest shareholders

Ordinary shares Number Percentage

H WALLACE-SMITH AND CO PTY LTD <HUGH WALLACE-SMITH S/F A/C> 11,793,995 4.98

D N SUPERANNUATION FUND PTY LTD <NEATE SUPER FUND A/C> 7,996,301 3.37

SECOND NAREMI PTY LTD 7,276,112 3.07

ANKAA SPRINGS PTY LTD 7,000,222 2.95

CANARY PTY LTD <PAUL GUEST S/F A/C> 6,500,000 2.74

PALAZZO NOMINEES PTY LTD <PALAZZO INVESTMENT A/C> 5,553,473 2.34

MR BRIAN MCCUBBING <B MCCUBBING SUPER FUND A/C> 5,000,000 2.11

FIRST FARLEY PTY LTD <TIMAR SUPER FUND A/C> 4,524,640 1.91

A N SUPERANNUATION PTY LTD <ANNE NEATE SUPER FUND A/C> 4,020,883 1.7

PLATO PROSPECTING PTY LTD 4,000,000 1.69

HAIFA PTY LTD 3,984,826 1.68

MR ADRIAN DARBY 3,567,594 1.51

CHESTER NOMINEES WA PTY LTD <M W WILSON SUPER FUND A/C> 3,200,000 1.35

HOLDREY PTY LTD <DON MATHIESON FAMILY A/C> 3,130,860 1.32

TRONES INVESTMENTS PTY LTD 3,000,000 1.27

UBS NOMINEES PTY LTD 3,000,000 1.27

ANDERBY QLD PTY LTD 2,800,000 1.18

JP MORGAN NOMINEES AUSTRALIA LIMITED <CASH INCOME A/C> 2,734,455 1.15

MR PETER DONALD ALLCHURCH 2,259,210 0.95

ULTRAGAS PTY LTD 2,012,174 0.85

Total top 20 93,354,745 39.39

Other 143,659,305 60.61

Total ordinary shares on issue 237,014,050 100

ADDITIONAL SECURITIES EXCHANGE INFORMATION

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2. Distribution of equity securities

Ordinary shares

1 - 1,000 119

1,001 - 5,000 215

5,001 - 10,000 197

10,001 - 100,000 711

100,001 - and above 307

1,549

There are 195 holders holding less than a marketable parcel of ordinary shares.

3. Unquoted securitiesThe Company had 2,250,000 unlisted options on issue as at the date of this report.

4. Substantial holdersSet out below are the names of the substantial holders and the number of equity securities held by those substantial holders (including those equity securities held by their associates), as disclosed in the substantial holding notices given to the company:

Number held Percentage of issued shares

Hugh Wallace-Smith 20,025,107 8.45%

5. Voting rightsSee Note 16 of the Financial Statements.

6. On-market buy backThere is currently no on-market buy back program for any of Eureka’s listed securities.

7. Company secretary, registered and principal administrative office and share registrySee Corporate Directory.F

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Level 1, 16 Ord Street, West Perth WA 6005

PO Box 1574, West Perth, 6872

Telephone: (61 8) 9321 9337 | Facsimile: (61 8) 6314 1557

www.eurekaenergy.com.au

ABN: 46 116 829 139

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For personal use only - asx.com.au · eureka E N E R G Y 2 annual report 2011 CHAIRMAN’S LETTER Dear Fellow Shareholders, I am pleased to welcome you to this report on …

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