Bass Oil : Quarterly Activities Report and Appendix 5B - December 2021

ASX Announcement

personal use only

25 January 2022

Quarterly report for the period ending 31 December 2021

Bass Oil Limited (ASX:BAS) ("Bass" or the "Company") is an Australian-listed oil producer with a 55% Operator interest in the Tangai-Sukananti licence in the prolific South Sumatra Basin. As announced 12 July 2021, Bass is also in the process of acquiring a portfolio of tenements in the Cooper Basin, South Australia. The Company is debt free and committed to creating and maximising value, leveraging its competitive strengths; its team, operating capability, reputation, and relationships in both Australia and Indonesia.

Highlights

• Bass progressing to completion of its Cooper Basin portfolio acquisition from Cooper Energy Limited
• The Company successfully completed a A$2.5m placement and rights issue during the period to fund the Cooper Basin acquisition and Bass' growth strategy
• Bass has made significant progress towards drilling the Tangai-5 well in Indonesia (scheduled start date of March 2022), having received all of the required approvals, procurement ongoing and earthworks commencing shortly.
• Production for the December 2021 quarter averaged 357 barrels of oil per day (bopd) (JV share) and averaged 403 bopd (JV share) for the full year 2021
• Net entitlement oil for the December 2021 quarter totalled 10,096 barrels of oil and the Company generated sales revenue of US$0.81 million (average oil price of US$77.87 received)
• Net entitlement oil for the full year 2021 totalled 80,986 barrels of oil and the Company generated sales revenue of US$2.93 million (average oil price of US$67.29 received)

Comparative Performance:

For

Key Performance Metrics

Net Production1 (mbbl)

Net Oil Sales1 (mbbl)

Net Entitlement to Bass (mbbl)

Sales Revenue (US$M)

Average Realised Oil Price

Cash (US$M)

Dec Qtr		Sep Qtr			Qtr on Qtr								Yr on Yr
					2021		2020
Q4 FY21		Q3 FY21			Change						Change
18.09	18.78			-3.7%		80.99	131.93			-38.6%
19.53	17.76			10.0%		81.80	132.28			-38.2%
10.10	9.35			8.0%		42.60	86.77			-50.9%
0.81	0.67			20.9%		2.93	3.19			-8.2%
77.87	69.77			11.6%		67.29	37.77			78.2%
1.50	0.61			145.9%		1.50	0.10			1400.0%

Note 1: Net Production and Oil Sales are reported at 55% of Gross Production and Oil Sales for consistency and excludes the deduction of Domestic Market Obligation (DMO)

For personal use only

Bass Oil Managing Director, Mr Tino Guglielmo, commented:

"Bass has materially progressed the acquisition of a suite of high-quality Cooper Basin assets during the quarter. This transaction represents a first step of the Company's growth strategy as it aims to achieve an ambitious production target of 1,000 bopd in the coming 24 months from its assets in Indonesia and Australia. We are excited to be expanding our portfolio of production and growth assets in an environment of increased oil prices.

Field Performance:

Tangai-Sukananti Quarterly Production (55% Bass)

	40.00
	35.00
(kbbl)	30.00
25.00
Production
20.00				22.79
	15.00
	10.00			21.33
						18.78
							18.09
	5.00
	0.00

Production for the December quarter was 18,086 barrels of oil (55% basis), down 3.7% from the September quarter. Quarterly oil sales were 19,529 barrels of oil net to Bass, up 10.0% from the previous quarter. The net entitlement oil to Bass was 10,096 barrels of oil for the December quarter after Domestic Market Obligation (DMO), up 8.0%.

Production for the full year 2021 was 80,986 barrels of oil (55% basis), down 38.6% from the 2020 calendar year. Annual oil sales were 81,799 barrels of oil net to Bass, down 38.2% from the previous year. The net entitlement oil to Bass was 42,597 barrels of oil for the full year 2021 after Domestic Market Obligation (DMO), down 50.9%.

Field production for the full year 2021 averaged 403 bopd JV share. Production performance was impacted by well downtime and natural field decline.

The Company has successfully mitigated the impact of the COVID-19 pandemic in Indonesia during 2021. Bass expects its COVID protocols to continue to 2inimize any foreseeable production interruptions.

Field Development:

In November 2021, the regulator granted approval for the drilling of the Indonesian Tangai-5 well and the Company's procurement plan. Bass has commenced procurement activities related to the drlling of the well and

the Company's engineering team continues well design and planning. Earthworks for the drilling location are commencing in early Q1 2022 and drilling is scheduled to commence during March 2022.

For personal use only

Figure 1: Tangai-Sukananti KSO Location Map

Corporate:

Cash Position

As at 31 December 2021, Bass' cash reserves increased 146% from the September 2021 quarter to US$1.50m and increased 1,400% on December 2020. The increase in cash reserves was heavily influenced by a capital raising completed in the second half of 2021 (see details below). The Company carries no debt.

Revenue

Oil sales for Bass totaled US$0.81m in the December quarter, an increase of 20.9% on September quarter taking oil sales for the full year 2021 to US$2.93m a decrease of 8.2% on the full year 2020.

Oil Price

Bass receives ICP crude pricing, linked to the benchmark Brent crude, which trades at a premium to West Texas Intermediate (WTI) crude oil. The Company realised an 8% increase in the average oil price for the December quarter to US$77.87 and realised an 78% increase in the average oil price over the full year 2021 to US$67.29 from the full year 2020. The Company has no oil hedges in place.

Capital Raising

Between August and early October 2021 Bass completed a share placement and rights issue to raise A$2,537,560 (before costs) to fund its Cooper Basin Portfolio acquisition, well optimisation acitivites and drilling of the Tangai-5 well in Indonesia.

The capital raising comprised a $1,000,000 placement to sophisticated and professional investors which was completed on 26 August 2021 (Placement) and a $1,537,560 Non-Renounceable Rights Offer which closed on 30 September 2021 (Rights Offer).

For personal use only

The Placement involved the issue of 500,000,000 new ordinary shares at $0.002 per share and 250,000,000 free attaching options exercisable at $0.004 on or before 30 September 2024. Existing shareholders were then provided the right to subscribe for one (1) share for every five (5) Bass shares held via the Rights Offer and 768,780,242 new new ordinary shares and 384,390,150 options were issued on the same terms as the Placement. Peak Asset Management was issued 125,000,000 options on the same terms as the Placement to facilitate the Placement and Underwrite the Rights Offer.

In all, 1,268,780,242 new shares and a total of 759,390,150 new options have been issued. All new options are currently listed on the Australian Securities Exchange (ASX:BASO).

Business Development:

Following an extensive review of acquisition opportunities both in Indonesia and Australia, Bass announced that it had entered into a conditional sale and purchase agreement with Cooper Energy Limited to acquire three non- operated Cooper Basin assets on 12 July 2021. The portfolio includes a 30% interest in the producing Worrior oil field and other acreage which exhibit material exploration potential. The acquisition was agreed for a total cash consideration of A$650,000.

The transaction represents a unique opportunity for Bass to acquire a quality portfolio of assets in the Cooper Basin (see figure 2) which will provide a platform to secure additional interests in this prolific hydrocarbon province. The assets are to all be operated by the highly regarded Beach Energy Limited.

The transaction remains subject to a number of conditions precedent and is progressing to completion. For further information on the transaction, please refer to the ASX release dated 12 July 2021.

Figure 2: Cooper Basin properties to be acquired by Bass Location Map

Recognition of Performance

For personal use only

Pertamina, the Indonesian national oil company, has recognized Bass Oil as the best performing KSO in Indonesia in 2021 in the latest review. The award aggregates performance in a number of areas such as Health Safety and Environment, operational as well as contractual performance.

This award is a pleasing recognition of the effort Bass and all its staff and contractors put in to maintain its reputation as a a company determined to live up to its values and to be an operator of choice in all areas we choose to operate.

Tenement Holdings:

Joint Operation	Location	Interest owned	Interest	Interest
			acquired/farm in	disposed/farm out
			during the quarter	during the quarter
Tangai-Sukananti KSO	Indonesia	55%	-	-

This ASX announcement was authorised for release by the Bass Oil Limited Board of Directors.