Environmental Social Governance.
Sustainability & Risk Management
Lakes Blue Energy is committed to implementing initiatives to help ensure Australia’s energy requirements are reliably satisfied without compromise to the environment and in line with the needs and expectations of the Company’s shareholders. The health and safety of Lakes Blue Energy employees, workers and the communities within which they operate are imperative to successful achievement of the Company’s vision.
CLIMATE CHANGE RISK
The Company recognises that climate change is a shared global challenge and that global and local policies in response to climate change may affect the Company. The Company identifies climate change and climate change regulation as strategic risks that ultimately may affect the Company’s future operating and financial performance. These risks include, but are not limited to, unpredictable weather conditions which may have direct or indirect adverse impacts on the Company’s operations or customer markets, including capital markets. THe Company remains alert to scenariors around global megatrends impacted by climate change, sich as globalisation, digitalisation and automation, and how these will imact the Company’s future activites.
ENVIRONMENTAL RISK
In relation to the exploration permits held by the Company, issues can arise from time to time with respect to abandonment costs, consequential clean up costs and environmental concerns. The Company could become subject to liability if, for example, there is environmental pollution and consequential clean up costs at a later point in time. It is not possible to quantify any such contingent liability. Whilst no guarantee can be given, the Company is note aware of any advices which would suggest that there is any particular exposure in relation to any of its present interests.
EXPLORATION COMPANY RISK
As the Company is an exploration company, the market’s perception of the value of its shares can alter significantly from time to time, causing fluctuations in the Company’s share price. Fluctuations may also occur as a result of factors influencing the price of shares in exploration companies or share prices generally, as well as drilling activities by other parties in the same general region. The price of shares rises and falls and many factors affect the price of shares including local and international stock markets, movements in interest rates, economic and political conditions and investor and consumer sentiment.. The stockmarkets generally remain voatile. More generally, hte Navgas South Australian interests are held in the form of licence applications which need to convert into exploration licences and then in due course production licences before petroleum can be produced, which carries with it various regulatory and process risks.
INDUSTRY NATURE RISK
Oil and gas exploration activity, especially drilling, by its nature is risky. Where explroation is successful, drilling operations can be affected by breakdowns, adverse weather conditions, site and geographical conditions, operational risks, shortage or delays in the delivery of rigs and/or other quipment, industrial disputes, government regulations, environmental issues and unanticipated costs. Hazards incident to the exploration and development of oil and gas properties such as unusual or unexpected formations, pressures or other factors are inherent in drilling and operating wells and may be encountered by the Company. Exploration may be unsuccessful. Exploration may prove to be more costly than expected or the proposed timing of exploration may not be achieved, this potentially putting strains on the Company’s financial positions.
BUSH FIRES
The Company’s operations may be carried out in bush fire prone areas. This can require special measures to be taken when performing, or impact the timing of, the Company’s field activities. Alternatively, the outbreak of bush fire may mean activities have to be suspended and additional costs (such as stand-by or replacement costs) incurred.
NATIVE TITLE RISK
Native title rights could adversely impact on some of the Company’s operations. If the Company’s ability to conduct future exploration and/or development and production activities is adversely affected, this may have a material adverse effect on the Company’s performance and the price at which its shares are traded.
CONTRACTUAL DISPUTE RISK
Contractual disputes with joint venture partners, operators and contractors can arise from time to time. Some of the Company’s projects are conducted as joint ventures. Where a venture partner does not satisfy its financial or other commitments or act in the bset commercial interest of the project, it could have a material adverse effect on the interests of the Company. The Company' is unable to predict the risk of financial failure, non-compliance with obligations or default by a participant in any venture to which it is, or may become, a party, or insolvency or managerial failuire by any of contractors used by the Company in its exploration activities. Given that the Company has entered into joint venture and farmout agreements, the inability of those joint venturers or farminees to meet contracted obligations couild adversely affect the Company’s capacity to carry out its own activities.
OPERATING RISK
Industry operating risks include the risk of fire, explosions, blow-outs, pipe failure, abnormally pressured formations and environmental hazards such as accidental spills or leakages of petroleum liquids, gas leaks, ruptures or discharges of toxic gassdes, the occurrence of any of which could result in substantial losses to the Company due to injury or loss of life, severe damage to, or destruction or property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigation and penalties and suspension of operations, the occurrence of any of which could result in substantial losses to the Company. Damages occurring as a result of such risks may give rise to claims against the Company. The occurrence of an evnet that is not covered, or fully covered, by insurance could have a material adverse effect on the business, financial condition and results of operations of the Company.
COMMERCIAL DISCOVERY RISK
Even if an apparently viable deposit is identified, there is no guarantee that it can be profitably exploited. While drilling may yield some hydrocarbons there can be no guarantee that any discovery will be sufficiently productive to justify commercial development or cover operating costs. There can be no assurance that the Company will achieve production as this will depend on a wide range of factors, including development decisions, capital costs and operating costs and the ability of the Company to fund these costs.
REGULATORY RISK
It may not always be possible for the Company to participate in the exploitation of succful discoveries made in any areas in which the Company has an interest. Such exploitation will involve the need to obtain the necessary licences or clearances from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretions by such authorities. It may or may not be possible from such conditions to be satisfied. Further the decision to proceed to further exploitation may require the participation of other companies whose interests and objectives may not be the same as the Company. Such further work may require the Company to meet or commit to financing obligations for which it may not have planned.
GOVERNMENTAL RISK
The impact of actions by governemnts may affect the Company’s operations including matters such as necessary approvals, land access, sovereign risk, additional or increased taxation and royalties which are payable on the proceeds or the sale of any successful exploration. Further, the approval of contractual arrangements in relation to exploration permits as well as the renewal of explroation permits is each a matter of governmental discretion and no guarantee can be given in this regard. A failure to obtain any approval would mean that the ability of the Company to particpate in or develop any project may be limited or restricted either in part or absolutely. Industry profitability can be affected by changes in tax policies and the interpretation and application thereof.