Good morning, everyone. It's just past 10:30 A.M., and I welcome you to this morning's annual general meeting of Amplitude Energy Limited. My name is John Conde, and I am the Chairman of Amplitude Energy. I extend a warm welcome to you all, and thank you for joining us. We acknowledge the traditional custodians of the land on which we work and live, and we pay our respects to elders past and present. Before we move to the formalities, there are several housekeeping matters that I would like to mention. In the case of an emergency, a beep, beep, beep will sound. Please remain seated, and a fire warden will attend to assist us. Additionally, an audio message alert will be clearly communicated and heard in all areas of the function space, including the restrooms.
Should an evacuation be necessary, the fire warden will guide all guests safely out the western doors onto Currie Street, where we will assemble in Light Square. I ask all present to turn off your mobile phones or to switch them to silent mode. Shareholder, proxy holder, and corporate representatives attending today's meeting will have the opportunity to ask questions and vote on the formal items of business. Today's meeting is being recorded and will be made available on the company's website within the next 24 hours. May I introduce to you the company's directors, all of whom are present at this meeting, and from your right to left, Jane Norman, Managing Director and Chief Executive Officer, Ian Davies, non-executive director, Tim Bednall, non-executive director, Jill Larkins, non-executive director, Gary Gray, non-executive director, and Frank Tudor, non-executive director.
In addition, we are joined by Eddy Glavas, our Acting Chief Financial Officer, Nicole Ortigosa, our Company Secretary and General Counsel, Tom Fratek, our Head of Investor Relations and Funding, Darren Hall, an Assurance Partner representing the company's auditor, EY, and other EY partners and officers, most of whom are currently engaged on the account, but one of whom was our lead partner for many years. The proceedings this morning will be as follows: I will address the meeting, and that will be followed by a presentation from the Managing Director. After the Managing Director's presentation, there will be an opportunity for you to ask questions, and then the formal part of the Annual General Meeting will commence after the questions. The 2025 financial year was a remarkable period for Amplitude Energy.
The company delivered record revenue, earnings, and cash flows, underpinned by higher and more reliable production performance and reduced costs. These results reflect the hard work and commitment of our people and the leadership of the Managing Director and CEO, Jane Norman, who in just over two years has led an outstanding turnaround in the operations. A particular highlight of fiscal 2025 was the material improvement at the Orbost Gas Processing Plant. Many of you will recall well the frustrations of historical production constraints under third-party ownership. To finish fiscal 2025 with Orbost operating in its nameplate capacity of 68 TJ a day for the month of June was a tremendous achievement. This improvement was the result of innovative problem-solving, persistence, and the dedication of our engineering and operational teams led by Chief Operating Officer Chad Wilson.
Maximizing production at Orbost remains a priority for fiscal 2026, as we explore further performance gains. Fiscal 2025 also saw significant progress on our next major growth initiative, the East Coast Supply Project. This project leverages our existing Otway Basin infrastructure to deliver an accelerated development pathway and attractive returns for our shareholders. During the year, we welcomed OG Energy as a joint venture partner in our Otway Basin assets. The joint venture parties are aligned on the desire to grow production in the basin. Building on this momentum, a few weeks ago, we announced the proposed expansion of the East Coast Supply Project through an intended fourth well at the Nestor Prospect.
This expansion will maximize utilization of our existing Otway Basin infrastructure and the available processing capacity at the Athena Gas Plant, creating flexibility to supply additional gas during periods of high demand and pricing, including for gas-powered electricity generation. Engineering and drilling regulatory approvals for Nestor are already in place, and together with OG Energy, the company is working towards an investment decision in early calendar 2026. To fund this and other growth opportunities, such as the potential restart of the Patricia Baleen field in the Gippsland Basin, our company completed a AUD 150 million equity raising in mid-October. We are very pleased with the level of demand shown for the equity raising, including from several new institutional investors and, of course, from many of our loyal shareholders.
With funding secured, approvals in hand, and an aligned partner, we are preparing to commence drilling the first well of the East Coast Supply Project soon. From calendar 2028 onwards, this project aims to provide one of the largest sources of new gas supply for the Southeast Australian market. The importance of new gas supply to Australia's economy and energy security is now being recognized. Millions of Australians rely on affordable natural gas every day in their homes, in their jobs, and in industries that produce essential products like bricks and glass. We expect the role of gas to become more important in our energy markets, in particular the electricity market. As renewables provide and become a greater share of the electricity mix, the need for gas-powered generation increases commensurately to ensure reliable power when the sun isn't shining and the wind isn't blowing.
Without new local supply, Southeast Australian consumers face higher costs and higher emissions if gas is diverted from Queensland or imported as LNG. Amplitude Energy is one of the few companies positioned to help address these looming shortages with low-cost local supply. This is at the core of our purpose being part of Australia's energy future. This past year has been significant in terms of board renewal. In August, we welcomed Ian Davies as a non-executive director. Ian brings exceptional leadership credentials and a nationally recognized track record in delivering complex energy projects. Subject to shareholder approval today, Ian will succeed me as chairman. I'm confident that under his stewardship, the board will continue to guide Amplitude Energy with wisdom and foresight. In September, we welcome Jill Larkins, who brings deep expertise in governance and transformation. Again, subject to shareholder approval today, Jill will chair the Audit Committee.
I thank Betsy Donaghey warmly for her seven years of valuable service to the board and acknowledge the service of Giselle Collins, who retired earlier this year after nearly four years of dedicated involvement. Following today's meeting, only one director on the board will have served for longer than three years, a testament to the board's commitment to renewal and diversity. Before I conclude, I wish to express my sincere gratitude to our shareholders. Thank you for your loyalty and support. It has been a privilege to serve you. To our staff, your hard work, resilience, and commitment to safety and excellence drive our success. To our customers and community stakeholders, we value your trust and partnership. To my board colleagues, past and current, for your wise counsel and collaboration at all times, and to Jane Norman for your outstanding leadership and vision.
With my current term on the board concluding at this meeting, I will retire as your Chairman. I leave with pride in what this company has achieved and with gratitude for the opportunities that you have all given me to serve you. It has been an honor, always, to do so. From Cooper Energy, a non-operating minority owner of oil and gas assets in the Cooper Basin, Amplitude Energy has become a significant gas producer with the ability to grow production and strengthen Australia's energy security. We acknowledge the strategic shift to focus on East Coast gas many years ago under David Maxwell, who is with us today, and welcome, David, whom I'm pleased to see is here. That shift brought with it plenty of challenges, as you all know, but has been successful.
And under Jane's leadership, the company is well positioned to build on these successes for its next phases of growth. Of course, I leave with a twinge of sadness. Amplitude has a wonderful team with strong personal values and a deeply rooted commitment to do the right thing and to take good care of our people and the environment. But eclipsing any passing sadness is my immense confidence in Amplitude Energy's future. I remain a keen observer and will rejoice in Amplitude Energy's successes. Thank you, shareholders, for your trust and your support over nearly 13 years. As I said earlier, it has been my great honor to have been your chairman. I now invite the Managing Director, Jane Norman, to address us.
Thank you, Chairman. It's my pleasure to address our shareholders today. Please note the disclaimer set out on this slide, and among the other matters here, I would draw your attention to the language regarding forward-looking statements. I'll start today by reflecting in more detail on our accomplishments through FY 2025 compared to our business priorities as set out at the start of the financial year. FY 2025 marked yet another record year for Amplitude Energy, laying the foundations for transformational growth. Firstly, on production, we exceeded our target with an average annual group production rate of 73 TJ equivalent per day across the year. In June, Orbost averaged its nameplate production rate of 68 TJ per day for the first time in its history, which resulted in group production exiting FY 2025 at 77 TJ equivalent per day.
This was delivered not only by the strong performance at Orbost, but also strong reliability at the Athena Gas Plant, which delivered greater than 99% reliability across FY 2025, a huge improvement compared to its historical performance. Secondly, on the East Coast Gas Supply Project and the drilling program. As the Chairman mentioned, FY 2025 saw significant momentum in our next major growth initiative. This included welcoming an aligned and supportive new joint venture partner in OG Energy and, more recently, the announcement of our intention to expand the project through the addition of a fourth well at the Nestor Prospect. With funding now secured, approvals in hand, and an aligned partner, we are preparing to commence drilling of the first well in early 2026.
On exploration success, the East Coast Supply Project is arguably the largest new gas supply project in the Southeast of Australia, a market that is very tight and desperately needs new gas supply. In terms of scale, the ECSP could deliver enough gas to meet the gas needs of over 800,000 Australian households. Thirdly, on increasing realized gas prices, the stronger market environment for domestic gas has delivered higher average realized gas prices of circa AUD 10 a gigajoule through FY 2025, a 12% increase compared to FY 2024. This is partly due to the new short-term contracts that we've signed off on the back of stronger Orbost performance, but also better prices in our spot sales, assisted by new opportunities to sell into both the Sydney and Victorian gas markets.
Finally, we continue to build on the success of the FY 2024 transformation program to drive a mindset of continuous improvement, identifying further opportunities and efficiencies across the business. For a business such as ours, keeping our costs flat as we increase production rates and revenue drives margin growth and stronger cash generation to accelerate debt repayment and fund our growth opportunities. You may recall we presented this slide at our full year results. I include it again here because it demonstrates our commitment to delivering on the value potential of our business. Over the last few years, our business has set a consistent track record for performance, growing production, earnings, and cash generation while lowering unit costs. When I assumed the role of Managing Director in early 2023, one of the things I heard loud and clear from our shareholders was the importance of delivering on our commitments.
And I'm proud of how the company has responded, building a consistent track record for performance. The relatively fixed cost base at our plants means that any additional revenue from higher production goes almost directly to the bottom line. This contributes to strong returns we can generate from projects like the ECSP and Patricia Baleen Restart. At Amplitude Energy, we strive to build a performance culture that delivers on what we promise. With the strong gas market tailwinds behind us, improving production performance, and the startup of the ECSP, shareholders should expect continued improvement in profitability in the future. As many of you will have heard me say time and time again, the Southeastern states urgently need new gas supply to meet forecast demand. And domestic gas produced through brownfield developments into existing infrastructure positions connected to markets is the most cost-competitive way to deliver new gas to customers.
Through our current discussions with wholesale and industrial gas users, we have confirmed the strong market demand for new gas supply beyond 2028 at price levels aligned with our expectations. Even though our East Coast Supply Project, which I'll speak more about in just a moment, is one of the largest opportunities for new gas supply in the Southeastern market, it does not fill the gap forecast by the Australian energy market operator. Much more gas is still needed, and buyers know the alternative is LNG imports, which could lift prices to above AUD 20 a gigajoule based on external independent analysis. We are well positioned with two plants strategically located close to the largest demand centers in the domestic market. The replacement value of the two plants alone is over a billion dollars.
With the cost and time involved in constructing greenfield sites becoming more and more challenging, our focus must be on unlocking the latent value and capacity in our existing plants and offshore infrastructure. First and foremost, this means backfilling the Athena Gas Plant, as we plan to do via the expanded East Coast Supply Project, now including a well in the Nestor Prospect. Athena will continue to have latent capacity even beyond the expanded ECSP, which means we have the ability to toll third-party gas through the plant or tie in additional developments to offer high-margin peaking products to customers. We've spoken already around getting the most out of Orbost and the cash generation and margin benefits that accrue from doing so. Our improvements and debottlenecking projects at Orbost are extremely capital-efficient, so the returns on success are excellent.
As those following us closely are aware, we have been pursuing regulatory approvals to enable the increased rate from Orbost, and we are now very close to securing those approvals and starting to increase the production rate. All technical regulatory reviews have been completed, and we are currently awaiting the final ministerial sign-off. Also, on the Gippsland Basin side of our portfolio, a restart of our Patricia Baleen asset is likely to be a high-returning portfolio accretive project. We are undertaking the Select phase work now ahead of the Front-End Engineering Design decision early in calendar year 2026. A Patricia Baleen restart could also provide additional production, present an interesting storage opportunity, and potentially open an opportunity to process gas from Seven Group's Longtom field.
We have offered Seven Group the opportunity to participate in the Select phase study under a long-standing MoU between us since we acquired the Orbost plant in 2022. To capture this growing market opportunity, we have recently expanded our East Coast Supply Project to include a fourth well in the Nestor Prospect. We are part of the ongoing Transocean Equinox campaign in the Otway, which has already started work for other members of the Rig Consortium. Highly sophisticated domestic and global investors have chosen to commit growth investment of well over $1 billion to the basin, including a 400-day drilling program over the next 12 months- 18 months. As you can see on the map on the right, our fields and infrastructure lie surrounded by the permits and drilling activities of other operators. The chart on the left puts this campaign into historical context.
You can see that after the first wave of exploration in the Otway, which formed the basis for Otway production for many years, exploration activity went relatively quiet for around 15 years. The focus on domestic gas exploration activity moved to northern and western Australia for many of those years. The lack of recent exploration activity, the availability of high-quality seismic data, and the local strong demand for gas combined to make the Otway Basin a very interesting and relatively low-risk exploration province. With exploration success, there are opportunities for all basin participants to benefit from future activity, including vessel sharing, brownfield infrastructure synergies, activity scale, and so on. The Otway Basin is truly a strategic national asset, differentiated from other domestic supply options. It's close to market with the infrastructure needed to deliver gas already installed.
Gas supply from the Otway is much more cost-effective, lower emissions, and faster to market than any gas imported from the northern states of Australia or offshore. Success in this region could make a meaningful difference in increasing Australia's energy security. Our major growth opportunity in the Otway Basin, the East Coast Supply Project, is presented on this slide. As a reminder, this is a two-phase project. The first phase is a drilling and completion phase, planned such that we can case, complete, and run a subsea tree on our exploration wells on success to enable us to rapidly enter phase II, the development and tieback to the Athena Gas Plant. The expanded East Coast Supply Project, including Nestor, on a gross basis now targets more than 360 billion cu f t of gross unrisked prospective resource on a P50 basis.
This is in addition to the Annie 65 PJ of gross contingent resource. On success, at steady production rates, this equates to over 14 years of reserves and resource coverage at the Athena Gas Plant, with first gas as early as 2028 to meet market demand. Nestor takes advantage of the current Transocean Equinox drilling campaign and having the rig in the region. This enables rapid commercialization of this low-risk, high-value opportunity. A successful development at Nestor not only increases group production, it provides optionality in our portfolio. Nestor could lift gross production at the Athena Gas Plant by up to 20 TJ-30 TJ per day, bringing full gas supply and cash flow. Alternatively, it could extend the plateau production at Athena for an additional two or more years, ensuring consistent supply into contracts and infrastructure utilization for a longer period.
It may also deliver a combination of both, and in its initial production period, depending on gas composition and well pressures, it could potentially allow Athena to run up to 130 TJ per day to capture favorable pricing in peak demand periods. This includes periods of gas power generation demand, which are expected to happen more frequently as coal retires and renewable power needs firming. The Transocean Equinox drilling rig is now working in the offshore Otway Basin and is expected to commence drilling our Elanora well in the first quarter of next calendar year. Detailed planning and engineering for the ECSP continues, with multiple contracts already awarded to progress drilling and long lead items, including subsea trees, are on track to be delivered ahead of our drilling windows.
We now have joint venture approvals required to order the Nestor tree, as previously announced, and we are ready to have the key external approvals required to proceed with the drilling phase to the expanded project, including Nestor. Planning for the plant modifications and subsea development phase of the ECSP is also progressing, with Front-End Engineering Design having commenced on this phase of the project and tenders for the subsea tie-in scope to be issued over coming months. Amplitude Energy and OG Energy intend to proceed to a final investment decision to undertake the development phase of the project in the first half of 2026. There are no better projects in oil and gas than ones that tie in nearby conventional fields to existing infrastructure. These types of projects are nearly always lower risk, faster to bring online, and better economics.
While significant upfront investment is required for the ECSP, with exploration success, the returns on this investment comfortably exceed our internal hurdle rates. With our base business performing strongly, we now turn our focus to the execution of the ECSP, our transformational growth opportunity, and one of Australia's largest new gas supply projects in Eastern Australia. In FY 2026, we will continue to drive shareholder value through increased gas production into a tight market. Specifically, we have four priorities. Firstly, progressing the ECSP, which includes drilling the Elanora and Isabella prospects, completing FEED on the development phase, securing gas sales agreements at market-competitive prices, and taking Final Investment Decision on the development phase.
Secondly, maximizing our asset utilization, which includes increasing capacity of Orbost to an instantaneous rate of more than 70 TJ per day, for which we are awaiting ministerial approval in the near term, and maintaining reliability loss of less than 1% across both plants. Thirdly, continuing to increase realized gas prices across our portfolio through our marketing and trading initiatives, including seeking opportunities to link our products to power generation. And fourthly, continuing to reduce our production costs and streamline systems and processes through our continuous improvement program, growing our margin and improving cash generation. Our priorities for FY 2026 are clear. We will continue to focus on driving value from our existing assets to increase cash flow. We will continue to work with key stakeholders, regulators, and customers to ensure we are in a position to sanction the development of the ECSP in FY 2026.
With the turnaround of the business in the last two years and the demonstrated track record for delivery, Amplitude Energy is positioned for transformational growth. In closing, I acknowledge the valuable guidance and support provided by the board throughout my time with the company, in particular that of our retiring chairman, who has made a profound contribution to the business throughout a period of great challenge and continuing change. Under John's guidance, the company has grown and traversed a complex external landscape alongside a growth agenda. We wish John all the best, and we know he will be watching us and with keen interest on our progress. I look forward to providing you with updates in the 2026 financial year as it progresses, and on that note, I'll hand back to our chairman for the formal part of today's meeting.
Thank you, Jane. I now invite questions from shareholders. Are there any questions or matters that you would like to discuss? I know we have received a couple of questions prior to the meeting, and I think we'll probably take those first, if that's okay, and then happy to take any questions from the floor. I ask Tom to read out the questions that we've received prior to the meeting.
So I've received a couple of questions in from retail shareholder by the name of Margaret Anne Trevors, and they're directed to our auditors. First question is, given Amplitude Energy has reported a 100% cost escalation for the Minerva decommissioning provision since November 2024, which resulted in a reported AUD 24 million pre-tax restoration expense increase against April ASX statement. What audit processes were undertaken to assess whether similar risks of cost escalation could materially affect other decommissioning or restoration provisions across Amplitude Energy's portfolio, and to ensure the company isn't impacted by future unexpected decommissioning cost escalations?
Thank you to our shareholder, Margaret Anne Trevors, for this question, and it's a question to the auditors. Before I pass to Darren Hall from EY to explain the audit procedures and to address the detail of the question, I just would like to provide some context for the benefit of shareholders. We update decommissioning cost estimates at least annually, and for the projects we operate, we obtain cost estimates from specialist external parties at least every three years, and we overlay that with our own internal experience and information.
It is important to note that with respect to the Minerva decommissioning, Amplitude Energy has a 10% non-operating interest in Minerva, with Woodside as the operator of the decommissioning project. We were disappointed with the Minerva cost estimate increases from the operator, but we understand that these relate to idiosyncratic project issues. As such, this has had limited bearing on our other decommissioning cost estimates, and as you would recall from last year, the decommissioning of BMG was a very different story to that, which is the subject of this question, so I invite Darren Hall from EY to respond to the question.
Thank you. Thank you, Chairman.
Do you want to come down here and you can then face the camera or be seen in the camera?
Thank you, Chairman, and thank you, Ms. Trevors, for the question. Before I address the question, I should state that for the record, under my role as lead audit partner for the company and under the Corporations Act, the questions that we are allowed to answer relate to the conduct of the audit, the content of the audit report, and the independence of the auditor. So we identify the restoration obligations as a separate key audit matter and have performed extensive audit procedures to form an independent opinion on the accounts taken as a whole, including the policies, the judgments, and the estimates in relation to restoration obligations. Note 15 to the financial statements sets out the company's accounting policy to restoration. It calls out the balance that it is an estimate, and it sets out significant judgments and uncertainties associated with that estimate.
Our audit report sets out on Page 139 of the Annual Report, includes two pages dedicated to the descriptions as to why restoration is a key audit matter, and importantly, the procedures that we undertake to address the reasonableness of the estimates, the policies, practices, and taken as a whole. Our procedures include, but are not limited to, understanding the process of controls carried out by the company, engaging our own internal sustainability specialists in the review and assessing the reasonableness of the gross cost estimates, and then assessing the reasonableness of the key gross cost inputs and market-based inputs such as inflation, discount rates, and foreign exchange rates.
Thank you, Darren. Thanks, Darren, and you may as well stay there because the second question also is directed to you. That question is, note 15 to the consolidated financial statements on page 115 indicates Amplitude Energy's restoration provision excludes pipeline removal costs on the assumption that, "offshore pipelines that are constructed from steel and concrete have previously been accepted by the Australian regulator to be decommissioned in situ, where it has been demonstrated that this will result in a net environmental benefit compared to full removal."
What audit procedure and verification was undertaken to validate this assumption for the purposes of AASB 137 provisions, contingent liabilities, and contingent assets, paragraphs 48- paragraphs 50? Given that the Offshore Petroleum and Greenhouse Gas Storage Act of 2006 default obligation is the removal of all offshore structures, and Australia's National Offshore Petroleum Safety and Environment Management Authority have never approved the in situ abandonment of a pipeline.
Thank you again for the question. So I will again refer you to the key audit matter section of our audit report, but specifically under the accounting standard, the amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. I'll make a few clarifying points. The regulation doesn't limit the criteria for in situ abandonment to as good or better environmental benefit solely, but instead it must also comply with other legislation which incorporates broader considerations such as health and safety regulations, among other things. So there is a broader consideration set than just the environmental impact by professionals in the industry that when they carry out the work.
In addition, the point about there never having been an approval from the regulator of an in situ abandonment of a large diameter pipeline in Australia is because there's actually very little precedent of any such regulator opining one way or the other for the removal of large diameter pipelines. The company's assessment of the most likely method of decommissioning is based upon a probabilistic assessment for each item of plant within each project, taking into account the requirements of the regulator, industry precedents, and international precedents, which the regulator must also adhere. It stipulates in its guidance and regulations that such international precedent and practices like that of Europe and the U.K. are good practice.
To that end, international precedent overwhelmingly sees operators in the industry leave large diameter pipelines in situ, despite every item of plant being assumed to be fully removed other than this one pipeline, and the plant being assessed has unique attributes that make the possibility of in situ abandonment more or less likely. We have accessed the company's assessments regarding the likelihood of an outcome for such an item of plant, and we are comfortable that we have obtained sufficient and appropriate audit evidence to support the assumption in the context of the Australian accounting standards, and that said, to assist the users of the financial statements, the company did quantify the impact of that judgment in the financial statements.
Thus, if the regulator was to take a contrary view to the company's position, this information is available and set out in the notes to these accounts. We note the outcome here will not be known until a decommissioning plan is submitted to the regulator in several years from now.
Thank you, Darren, and again, in terms of Amplitude's experience in this area of decommissioning, I can't help but remind you of the two awards that were received this calendar year for the decommissioning work at BMG. The first award, these are industry awards. The first award was the Australian Financial Review Energy Awards when we were awarded the Wellbeing, Health, and Safety Award, and secondly, at the Australian Energy Producers Awards, which I believe is awards voted on by industry participants and peers, we were awarded Safety Project Excellence Award, and that related to the BMG decommissioning project, which was a major project for this company, which was completed in fiscal 2024 within time and within the budget and with a very, very excellent safety experience.
Anyway, thank you again to the shareholder for those questions, which were principally directed at the auditor, but thank you to Ms. Trevors for taking the trouble to articulate the detailed questions that were put. So I now turn to the floor. Are there any other questions on any matter that anybody would like to ask? Yes, please.
Okay. I first want to commend Amplitude Energy on the successful execution of phase I of the BMG decommissioning project. The recent positive media coverage regarding the completion of this complex undertaking, coupled with the company's safety record throughout the process, deserves recognition. However, in reviewing the Annual Report, it was noted that the final cost of the BMG project exceeded the initial budget allocation. My question to the board is twofold. Firstly, could the board please clarify the specific quantum of this cost overrun for the BMG decommissioning project?
And secondly, given the experience and lessons learned from phase I of the BMG decommissioning, what is the company's updated comprehensive forecast for total future decommissioning costs across all assets? And can the board assure shareholders that this revised expectation is accurately and conservatively reflected in the company's future liabilities?
Well, thank you for the question. As a general sort of context to answering the question, we do look very carefully for obvious reasons at the decommissioning obligations, and we look at that at least annually. I think that a point to make with respect to BMG was that the final cost budget was different from the original cost estimates. That's true, and was caused really by significant increases in daily rates and the vessel hire and some of the labor costs.
But it was still completed at a time when our costs were well within what was currently being offered in the market, and we were funded to complete the revised budget for the decommissioning, and we did complete the decommissioning within that revised budget. In terms of phase II, some of that is covered in my remarks about the annual review of decommissioning obligations and the review as to the scope of the decommissioning project and the timing of the decommissioning project. It's been a period of rapid change and increase in vessel costs, and we participated for our drilling generally, not as far out as the BMG phase II decommissioning in a rig consortium to give us access to vessels at what were competitive rates to lock in at the time. But I wonder if the Managing Director would like to amplify my response.
Thank you, John. Thanks for the question. So just to break it down into the subparts, the cost overruns on the project were largely due to Helix's Q7000 vessel being delayed in New Zealand and the costs we were incurring holding the other supply and support vessels for that program. So that's really what led to the cost overrun. Other than that, the cost estimates were pretty much reflected in the actual costs that we incurred. But that program in New Zealand was meant to take 70 days. It took 170 days, so we ended up holding our vessels for about four months, and that was the major component of the cost overrun. In terms of lessons learned, yep, absolutely, and we're even employing those on this Otway campaign.
So we put together the consortium that's got Woodside, Conoco and Beach Energy in it, and we have hired that whole consortium as an integrated spread. So yes, we've immediately adopted the major lesson from that, which is have it as an integrated spread. In terms of the cost estimates on our accounts, we do a thorough revision every three years, and we've just done that, and it's been published in the FY 2025 annual accounts. That includes using independent experts, both Delta and Petrofac, to do those estimates, and it also reflects actual industry practice as well.
So we publish a page in our full year results every year, which breaks the restoration down into the next five years and beyond the five years, and around 85% of our restoration is expected beyond the five-year mark. So there's more detail on that page in the full year results presentation.
Are there other questions? Yes, there's a question up the back.
Yeah, my question is directed to the auditors and concerns the potential for additional decommissioning costs. Yeah, I couldn't quite hear the questions that have previously been asked, and I'm not sure that this question was answered entirely. So to begin, note 15 of the Annual Report acknowledges the actual restoration costs can materially differ from current estimates and specifies that the full removal of pipelines would add approximately AUD 35 million-AUD 85 million to the liability.
Given this material range of potential exposure, how did the audit team assess whether the current provision adequately covers this risk? And more specifically, for the purposes of complying with the Australian Accounting Standards 137 provisions, contingent liabilities and contingent assets, how did the auditor determine that there was sufficient objective evidence to conclude that the regulator would permit the company to leave the pipelines in situ, given the lack of existing precedent for this within Australia? Thank you.
I'll ask Mr. Hall to comment on that question. Thank you for the question.
Sure. Thank you very much for the question. If it's okay, I'll take the last part first. I do think I addressed the last part in the last question, so I might refer you to that answer because it was pretty long as it was. The first part of your question did refer to the note where it makes a point of pointing out that for the pipeline that is assumed to be left in situ, what the range of the potential estimate is.
Like I said, we carry out extensive procedures as set out in that key audit matter or the audit report on Page 139, and that does include looking at precedents both here in Australia and internationally. We are comfortable that we've obtained substantial evidence to support the company's position around leaving that in situ and certainly on the basis of it complying with the requirements of the standard 137. We have set out, or the company has set out, those uncertainties as it relates to any estimate, and so they have fulsomely disclosed that in note 15, and so I'd draw your attention to that.
And like I said, although that estimate or provision does give you a range and says this is the potential that's out there on a gross cost estimate basis, that's not to say that that is the number that would be recognized in the financial statements, but it's trying to give the users a range of potential outcomes as it does with any uncertai nty and estimate that one would disclose.
Thank you. Are there any other questions? Well, thank you again for those questions. But there being no further questions, we will move on to the formal part of the Annual General Meeting of Amplitude Energy. I'm informed that there is a quorum present, and therefore the meeting is properly constituted, and I declare this formal part of the meeting open. The proxies received for today's meeting are held by Computershare.
We have received proxies representing 2,350,305,949 shares, approximately 71% of the company's issued shares. Where a proxy has been given to the chairman without voting instruction, in all cases, I intend to vote in favor of resolutions one to seven inclusive. The Notice of Meeting dated October 3 has been circulated to all Amplitude Energy shareholders, and I will take that notice as read. The minutes of the previous annual general meeting of the company held on the 7th of November 2024 have been signed, and a copy is available for inspection. Ms. Ortigosa has the minutes here at the front. I now deal with the formal items of business set out in the Notice of Meeting. I confirm that shareholders attending today's meeting and wishing to ask a question, provided it relates to the relevant agenda item under discussion, will be given the opportunity to do so.
All resolutions will be put to a poll at the end of the formal business. To ask a question, please uphold your blue or pink admission card, and when I give you the call, please state your name and ask your question. The first order of business is to receive and consider the financial statements and related reports by directors and auditors. I confirm that all shareholders who have requested a printed copy have been mailed a copy of the company's 2025 Annual Report. The Annual Report is also available on the company's website and contains the annual financial report together with the reports of the directors and auditor for the financial year ended 30 June 2025.
There is no resolution required, but if shareholders have any questions or comments regarding the financial statements and reports, including any questions as to the conduct of the audit and the preparation and content of the auditor's report, I invite you to ask those questions now. Well, thank you. We'll move on. There are seven resolutions to be considered by the meeting today, and as I mentioned during my welcoming remarks, votes will be taken from shareholders, proxy holder, or corporate representatives entitled to vote and who have attended in person. Resolution one is the adoption of the Remuneration Report. Consistent with section 250R of the Corporations Act, the company submits to shareholders for consideration and adoption by way of a non-binding vote its Remuneration Report for the year ended 30 June 2025. The vote on resolution one is advisory and will not bind the directors or the company.
However, the board will take careful note of the outcome of the vote and take this into consideration when reviewing remuneration practices and policies. I now move that the Remuneration Report as set out in the Directors' Report for the financial year ended 30 June 2025 be adopted. The proxy votes received for this resolution are shown on the screen. Please also note that as set out in the Notice of Meeting, key management personnel and their closely related parties are excluded from voting on this resolution. Please see the Notice of Meeting for more detail on how this voting prohibition is to be applied. The resolution is open for discussion. Does anybody wish to ask any questions on the Remuneration Report? There being no questions, this resolution will be put to a poll at the end of the meeting.
As I said, Computershare will conduct all polls at the end of the meeting. The final poll results for all resolutions will be released to the ASX and posted on the company's website when they are available this afternoon. Resolution two, the election of Mr. Ian Davies as a director. Mr. Davies was appointed by the board as a non-executive director of the company effective the 1st of August 2025. In accordance with clause 8.2 of the Constitution, a director appointed by the board ceases to hold office at the conclusion of the next annual general meeting and is then eligible for election. Mr. Davies is seeking election as a non-executive director of the company. Details of his background and experience are contained in the Notice of Meeting, and I have great pleasure in moving that Mr.
Davies be appointed as a non-executive director of the company and that he be elected now in accordance with clause 8.1 of the Constitution because he ceases to hold office at the conclusion of this Annual General Meeting. I move that he be elected as a non-executive director of the company. The proxy votes for this resolution are displayed on the screen, and the resolution is open for discussion. Does anybody wish to ask any questions? There being no further questions and noting the votes received by proxies, the resolution will be put to a poll at the end of the meeting, but I am confident to congratulate Mr. Davies on his election to the board.
Thank you, John.
Resolution three, election of Ms. Gillian Larkins as a director. Ms. Gillian Larkins was appointed by the board as a non-executive director of the company effective from the 1st of September, I think, 2025. In accordance with clause 8.2 of the Constitution, a director appointed by the board ceases to hold office at the conclusion of the next annual general meeting and is then eligible for election.
Jill Larkins is seeking election as a non-executive director of the company. Details of her background and experience are contained in the Notice of Meeting. I have pleasure in moving that Ms. Gillian Larkins, being appointed as a non-executive director of the company by the board in accordance with clause 8.1 of the Constitution since the last annual general meeting and who ceases to hold office at the conclusion of this annual general meeting in accordance with clause 8.2, be elected as a non-executive director of the company.
The proxy votes received for this resolution are displayed on the screen. The resolution is open for discussion. Does anybody wish to ask any questions? There being no questions, this resolution will be put to a poll at the end of the meeting. Again, confidently inferring from the proxy votes received, I welcome Jill, you to the board. Thank you. Resolution four is a resolution regarding the renewal of proportional takeover provisions. Clause 163 of the company's Constitution deals with proportional takeover bids in accordance with the Corporations Act and is designed to assist shareholders to receive proper value for their shares if a proportional takeover bid is made for the company. A proportional takeover bid is one where an offer is made to each shareholder for a proportion of that shareholder's shares.
A proportional takeover bid may enable control of the company to pass without shareholders having the opportunity to sell all of their shares to the bidder, and as you'd appreciate, this may expose a shareholder to the risk of being left as a minority in the company and/or the risk that the bidder may be able to acquire control of the company without payment of an adequate control premium. Under section 648G of the Corporations Act, this provision must be renewed every three years or it ceases to have effect. Clause 163 was renewed at the 2022 AGM and continues to have effect until the 10th of November this year. If renewed, the provision in clause 163 will have effect for a further three-year period until the 6th of November 2028. The proportional takeover provisions set out in clause 163 do not apply to full takeover bids.
I refer you to the explanatory notes for the information which the Corporations Act requires be provided to shareholders when they are considering the inclusion of a proportional takeover provision in the Constitution. I move that pursuant to clause 648G of the Corporations Act, the existing proportional takeover approval provision in clause 163 of the Constitution is renewed for a further period of three years commencing on the date of the expiry of the last renewal period for clause 163. The proxy votes received for this resolution are displayed on the screen. The resolution is open for discussion. Does anybody wish to ask any questions? There being no questions, the resolution will be put to a poll at the end of the meeting. Pardon me. The Equity Incentive Plan. The company's Equity Incentive Plan, or EIP, was most recently approved by shareholders at the company's 2022 AGM.
Since that time, the company has reviewed the remuneration in terms of the EIP with the assistance of external advisors. As set out in the explanatory notes in the Notice of Meeting, the company's remuneration framework has been formulated with a view to attracting and retaining highly skilled directors and employees who are motivated to pursue and deliver the company's strategy and goals, ensuring that directors and employees receive remuneration that is fair, reasonable, and competitive, and providing incentives to deliver future individual and company performance. I refer you to the explanatory notes for a summary of the Equity Incentive Plan, and I confirm that non-executive directors do not participate in this plan.
I move that for the purpose of Listing Rule 7.2, Exception 13(b), and for all other purposes, the company's Equity Incentive Plan as summarized in the explanatory notes and the grant of rights and issues of shares under that plan be approved. The proxy votes received for this resolution are displayed on the screen. There is a voting exclusion. The company will disregard any votes cast in favor of resolution five by or on behalf of a person who is eligible to participate in the company's Equity Incentive Plan or any of their associates. Please see the Notice of Meeting for more detail on how that voting exclusion is applied. This resolution is open for discussion. Does anybody wish to ask any questions on the Equity Incentive Plan? There being no questions, this resolution will be put to a poll at the end of the meeting. Resolution six, share consolidation.
The company is seeking the approval of shareholders to consolidate its issued capital on the basis that every 11 shares be consolidated into one share. If the resolution is passed, the result of this consolidation is that the number of shares on issue will be reduced to 9.09% or further decimal places if you wish of their current number. Further, as a result of proceeding with the consolidation, issued performance rights and share appreciation rights will be consolidated in accordance with their terms, that is, on an 11 for 1 basis to reflect the effect of this consolidation. The directors expect that the consolidation will result in a higher headline price for the company's shares without having a material impact on the aggregate value of each shareholder's holding or the company's market capitalization.
A higher headline share price, everything else being equal, should first reduce the volatility in the company's share price in percentage terms. Secondly, reduce the bid-offer spread in the company's shares in percentage terms, thereby reducing the cost of trading in the shares. Third, potentially attracting additional investors in the company's shares. And fourthly, reflect better Amplitude Energy's status as a mature production gas company. I move pursuant to section 254H(1) of the Corporations Act and clause 112 of the Constitution and for all other purposes, approval is given for the company to consolidate its issued share capital on an 11 for 1 basis. The proxy votes for this resolution and the resolution are displayed on the screen, and the resolution is open for discussion. Does anybody wish to ask any questions?
Yes, sir. Robert Host is my name. Could you tell me the significance of the number 11? Why not an 11- 1 or a 10 or a higher number like 22?
You're certainly correct, sir, in your mathematical observations. There's no particular reason why not nine or 13 or 10 or 12 or maybe a much higher number might be producing a result which is at the other end of a scale. But there is no magic in the number. It's a number that's around 10 but isn't easily calculated as 10, and so it'll produce a share price which is a fresh number and roughly 10x what it is currently. I'm sorry to say there is no science in the number. Is there another question? The proxy votes received for this are displayed on the screen, and the resolution will be put to a poll at the end of the meeting. Resolution seven, the issue of performance rights to the Managing Director.
The board considers that its senior executives should be remunerated in a manner that encourages them to become shareholders, as this is the best mechanism to align their interests with those of the company's shareholders. It's the company's policy that performance is based, that is, at risk, that the risk-based pay of senior executives is to form a significant proportion of their total remuneration. Granting incentives under a long-term incentive plan seeks to encourage and reward long-term sustainable performance. And Listing Rule 10.14 provides that a company must not issue or agree to issue securities to a director under an employee incentive scheme without the prior approval of the holders of ordinary securities.
Under section 200B of the Corporations Act, a company may only give a person a benefit in connection with their ceasing to hold a managerial or executive office in the company, such as that held by Ms. Norman, or a related body corporate if it is approved by shareholders under section 200E or an exemption applies. Under resolution seven, shareholder approval is sought for the issue of performance rights as incentives to Ms. Norman.
Subject to shareholder approval, the incentives will be issued in accordance with an invitation made by the board pursuant to the terms of the company's Equity Incentive Plan, which is to be approved by shareholders at this AGM. I now move that for the purposes of Listing Rule 10.14, sections 200B and 200E of the Corporations Act and for all other purposes, the issue to Ms. Jane Norman of performance rights pursuant to the company's Equity Incentive Plan as described in the explanatory notes to the Notice of Meeting be approved. The proxy votes are displayed on the screen.
And again, the company will disregard any votes cast on this resolution by Ms. Norman, her nominees, or any of their associates, and by the company's key management personnel as named in the Remuneration Report, or by any closely related party of a member of the key management personnel acting as a proxy. Please see the Notice of Meeting for more detail on how this voting exclusion will be applied.
The resolution is open for discussion and questions. Are there any questions? There being no questions, this resolution will be put to a poll at the end of the meeting. The conduct of the poll will be undertaken by Computershare, who have been appointed to this task. We will now conduct the poll on resolutions numbered one to seven. First, if there is any person present who believes they are entitled to vote but is not registered to vote, would you please raise your hand for assistance?
The persons entitled to vote on this poll are all shareholders, representatives and attorneys of shareholders, and proxy holders who hold blue admission cards. On the reverse of your blue admission card is your voting paper and instructions. I'll now go through the procedures for filling out the voting papers. Proxy holders have attached to their admission card a summary of proxy votes which details the voting instructions for business items on the appointment documents in your favor. By completing the voting paper when instructed to vote in a particular manner, you are deemed to have voted in accordance with those instructions. In respect of any open votes a proxy holder may be entitled to cast, you need to mark a box inside the motion sorry, mark a box beside the motion to indicate how you wish to cast your open votes.
Shareholders also need to mark a box beside the motion to indicate how you wish to cast your votes. Please ensure you print your name where indicated, and when you've finished filling in your voting paper, please lodge it in one of the ballot boxes to ensure your votes are counted. If you are requiring any assistance, please raise your hand. And we'll pause for a moment to allow you to complete your forms. Can I just confirm, please? If you require any further time to complete or lodge your voting paper, please raise your hand. Well, I declare closed the poll. The results of the polls will be declared by announcing the details when they are available to the ASX, and that'll probably be after the close of the meeting. Well, thank you all again. We have now completed the formal part of today's meeting.
Before I declare the meeting closed and cease to hold office as your chairman, may I say again that it has been my great honor to serve on the board with fellow directors and to act as chairman for nearly 13 years. I record again my sincere thanks for the support I have received during this time. As I step down, I do so with great confidence in the future leadership of the board and the company. I'm delighted to welcome Ian as your next chairman and to introduce him to you all and to ask him to say a few words. Please welcome your new chairman, Mr. Ian Davies.
Thank you very much, John. I've really enjoyed getting to know you, actually, and in the role on the board and with the brief time that we've had together on the board with you as chair. It's been an absolute pleasure, and I've had the privilege of serving on the board for several months now, and I look forward to the months and years ahead as chairman of the board. I'm honored to take on the responsibility and to continue building on this company's very strong foundations.
I acknowledge you, John, of course, Jane, our CEO. It's been wonderful working with you as well. We've known each other quite a while. I'd like to acknowledge also my fellow directors, David Maxwell, who I've also known for a very long time, the previous CEO of the business. Welcome, David, and it's good to see you here, and the staff supporters who are here today and, of course, our wonderful and important shareholders. As many of you may know, I've spent most of my professional life working in Australia's upstream natural gas industry.
Throughout my career, I've been fortunate to work in companies that have had valuable gas resources, great people, and really strong commercialization opportunities. I continue to strongly believe the work we do is absolutely fundamental to our daily lives, to thousands of workers, and to the energy security of both our country and to many of our trading partners. As I look to the basins that Amplitude Energy, I have to get used to that. As I look to the basins that Amplitude Energy operates in and the gas markets that we sell into, it's clear to me that this company has an incredible opportunity to grow supply and help address the looming structural gap in the local southeastern market.
While gas regulations have become quite a bit more complicated in the last 20 years, our resources in the Gippsland and Otway Basins and market opportunities we have available to us mean that growing production with projects like the East Coast Supply Project is a really compelling strategy. But the pursuit of growth cannot be for growth's sake. I believe strongly in only pursuing projects that well exceed reasonable risk-adjusted return hurdles. Shareholders should be able to trust that we will respect their capital and make sound investment decisions that generate appropriate returns on their capital. From my experience to date, Amplitude certainly punches above its weight in its contribution to the local market and in advocating for local gas.
While the company isn't as large as some of our peers, clearly, it has demonstrated the ability to move quickly, create innovative solutions to long-standing problems, and bring its people and communities together to support local gas development. Amplitude Energy has the opportunity to be one of the leaders of the domestic gas industry, and I'll do everything in my power as chairman to allow the company to achieve that potential. This means the board will need to be decisive, act quickly to take advantage of opportunities, ensure the company cares for its people and the environment, and proudly represents itself to our industry, to external stakeholders.
And of course, the board will continue to be ultimately respectful of our shareholders' capital and our shareholders. I extend my sincere thanks to you, John, for your outstanding leadership and dedicated service over nearly 13 years. I look forward to working with each of you to deliver on Amplitude's promise in the year ahead. Thank you very much.
Thank you, Ian. Thank you all for your attendance today. I declare the meeting closed. Please join us for refreshments, which are available next door.