3.2. Product demand Time Horizon Demand Short Term AEMO GSOO 2024 highlights the risks of gas supply shortfalls in Southern Australia from 2025 with supply not meeting demand from 2028 as Southern Australia production declines. IEA global oil demand is forecast to rise by 3.2 million barrels per day between 2023 and 2030. Indonesia has announced 2030 targets for increased domestic oil and gas production. Medium/Long Term The Australian Energy Market Operator (AEMO) predicts Northern Territory gas demand to increase to the mid 2030s. The Australian Government “Future Gas Strategy 2024” recognizes that under all credible net zero scenarios, natural gas is needed through to 2050 and beyond. Indonesia recognizes the crucial role of natural gas in sustainable development as a key facilitator of the Energy transition, alongside renewables. 3.3 Regulations Cue navigates varying regulatory landscapes across these countries, assessing risks related to climate change, carbon pricing, and physical impacts. Adaptation and strategic planning are essential to ensure operational resilience and compliance. Country Approach New Zealand New Zealand Emission Trading Scheme (ETS) market pricing and forecasts used for carbon emissions. NZUs purchases annually to fulfill obligations. Modelled NZU prices are used in Maari performance forecasts and sensitivity testing. Australia Cue is currently not under any regulated carbon pricing mechanism in Australia. Onshore Australia emissions are reported under the National Greenhouse and Energy Reporting (NGER) scheme by the field operator and are below the current safeguard mechanism threshold. The recent Mereenie flare gas recovery project has further reduced Mereenie emissions. The Internal price used for investment economics is based on market pricing with sensitivity testing included for potential changes in regulations. Indonesia Indonesia has introduced sector based carbon pricing regulations which currently do not apply to Cue’s operations. We monitor the potential economic effects of climate-related policy and climate conditions on asset value and operation, which at this stage are uncertain in their implementation. 3.4. Alternative Energy Scenarios The Company monitors the various Energy outlooks and industry forecasters. Short-term demand for gas is expected, however, decarbonization progress could impact the long-term outlook. Gas fields cannot quickly increase supply in response to higher demand, potentially leading to upward price pressure in a slower transition. Lower prices may result in slower investment in deliverability. In Australia and Indonesia, there’s regulatory interest in capturing carbon emissions. If carbon capture and storage (CCS) becomes more cost-effective, Cue may explore emission reduction through CCS although no abatement plan currently exists. Additionally, falling oil prices driven by electrification of transport, could affect Cue’s interests in the Mahato and Maari oil fields. This risk is reflected in sensitivity analysis based on forward price curves. Financial resilience is reviewed as part of risk management, with material risks disclosed in financial reports. Taskforce on Climate–Related Financial Disclosures (TCFD) Statement continued 19 Cue Energy Resources Limited Annual Report 2024
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