Cue Energy Resources Limited Notes to the financial statements 30 June 2024 46 Note 11. Non-current liabilities - provisions Consolidated 30 June 2024 30 June 2023 $'000 $'000 Employee benefits 2 - Restoration provisions 28,607 28,563 28,609 28,563 Movements in restoration provision during the financial year are set out below: Restoration provisions Consolidated - 30 June 2024 $'000 Carrying amount at the start of the year 28,563 Change in provisions recognised (527) Unwinding of provision 620 Impact of foreign currency translation (49) Carrying amount at the end of the year 28,607 Consolidated 30 June 2024 30 June 2023 $'000 $'000 Restoration provisions 28,607 28,563 Advances paid for restoration works (6,069) (5,994) Net unfunded restoration provisions 22,538 22,569 In accordance with legislative obligations in the respective jurisdictions in which the Consolidated Entity operates, contributions are made to special purpose funds established solely for the purpose of financing future restoration works, any amounts which have been funded are not available for general use and restricted solely for the purpose of funding future restoration works. As at 30 June 2024, $6.07 million (30 June 2023: $5.99 million) has been contributed to such funds in respect of the Sampang asset in Indonesia. Accounting policy for provisions A provision is recognised in the statement of financial position when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risk specific to the liability. Restoration provision The expected timing of outflows for restoration liabilities is not within 12 months from the reporting date. The provision of future restoration costs is the best estimate of the present value of the future expenditure required to settle the restoration obligation at the reporting date, based on current legal requirements. Future restoration costs are reviewed annually and any changes in the estimate are reflected in the present value of the restoration provision at the reporting date, with a corresponding change in the cost of the associated asset. When the liability is initially recognised, the present value of the estimated costs is capitalised by increasing the carrying amount of the related oil and gas assets to the extent that it was incurred by the development/construction of the field, any subsequent changes to the provision, excluding the unwinding of interest in producing assets, commensurately changes the carrying amount of the related oil and gas asset. 60 Cue Energy Resources Limited Annual Report 2024
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