Page 67 - Sun Resources Annual Report 2013

18 Share-based Payments (continued)
The Company issued 5,000,000 unlisted options on 12 September 2012 to a Director Mr D Kestel with an exercise price
of $0.105 per option on or before 12 September 2015 as an incentive. The fair value calculated as $171,676 for these
three year options at the date of issue was independently determined using the Black-Scholes option pricing model that
takes into account the exercise price ($0.105), the share price at grant date ($0.07), expected volatility of the share price
(90%) and the risk-free interest rate (2.45%).
The Company issued 1,000,000 unlisted options on 8 August 2012 to Mr Stewart Bayford with an exercise price of
$0.094 per option on or before 9 August 2015 as an incentive. The fair value calculated as $30,263 for these three year
options at the date of issue was independently determined using the Black-Scholes option pricing model that takes into
account the exercise price ($0.094), the share price at grant date ($0.062), expected volatility of the share price (90%)
and the risk-free interest rate (2.45%).
The Company issued 20,000,000 unlisted options on 12 September 2012 to a stockbroking firm with an exercise price
of $0.025 per option on or before 31 March 2014 in consideration for services rendered in relation to the expansion of the
Delta Oil Project. The fair value calculated of $991,009 for these 18 month options at the date of issue was independently
determined using the Black-Scholes option pricing model that takes into account the exercise price ($0.025), the share
price at grant date ($0.07), expected volatility of the share price (90%) and the risk-free interest rate (2.45%).
The Company issued 8,265,000 unlisted options on 12 September 2012 to the Vendor of the Delta Oil Project with
an exercise price of $0.025 per option on or before 31 March 2014 in consideration for the acquisition of the Delta
Oil Project. The fair value calculated of $409,534 for these 18 month options at the date of issue was independently
determined using the Black-Scholes option pricing model that takes into account the exercise price ($0.025), the share
price at grant date ($0.07), expected volatility of the share price (90%) and the risk-free interest rate (2.45%).
The Company issued the following Performance Options on 12 September 2012 to Carina Energy LLC:
Class D Performance Options
The Company issued 10,744,500 class D performance options on 12 September 2012.
These options can be exercised if the Company acquires at least 5,000 net acres of additional oil and gas leases
(introduced by the Delta Oil Project Vendor on acceptable terms to the Company, acting reasonably) by 5pm WST on
28 February 2013. The Company determined that it was “more likely” rather than “less likely” that the performance
milestone would be achieved.
A Black-scholes valuation was completed for this 3rd progressive issue using an applicable exercise price of $0.001
per option on or before 28 February 2013 in consideration for the acquisition of the Delta Oil Project. The fair value
calculated as $741,656 for these options at the date of issue was independently determined using the Black-Scholes
option pricing model that takes into account the exercise price ($0.001), the share price at grant date ($0.07), expected
volatility of the share price (90%) and the risk-free interest rate (2.45%).
Class E Performance Options
The Company issued 10,744,500 Class E Performance Options expiring no later than 5pm on the 30 April 2017.
These options can be exercised if the Company attains 2P Reserves (net to the Company) of 10,000,000 barrels of
oil and average daily oil production of 500 barrels of oil per day (from assets introduced to the Company by Carina) by
5pm WST on 31 August 2016.
The Company determined that it was “less likely” rather than “more likely” that the performance milestone would be
achieved due to the inherent uncertainty of oil & gas exploration.
A value of zero was given to this class of options.
Class F Performance Options
The Company issued 12,397,500 Class F Performance Options expiring no later than 5pm on the 30 April 2017.
These options can be exercised if the Company attains 2P Reserves (net to the Company) of 20,000,000 barrels of oil
and average daily oil production of 1,000 barrels of oil per day (from assets introduced to the Company by Carina) by
5pm WST on 31 August 2016.
The Company determined that it was “less likely” rather than “more likely” that the performance milestone would be
achieved due to the inherent uncertainty of oil & gas exploration.
A value of zero was given to this class of options.
Class G Performance Options
The Company issued 75,000,000 class G performance options on 12 September 2012.
These options can be exercised if the Company acquires at least 5,000 net acres of additional Woodbine oil and gas
leases (introduced by the Delta Oil Project Vendor on acceptable terms to the Company, acting reasonably) by 5pm
WST on 30 June 2013. The Company determined that it was “more likely” rather than “less likely” that the performance
milestone would be achieved.
SUN RESOURCES ANNUAL REPORT 2013 65
NOTES TO AND FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS