Page 70 - Sun Resources Annual Report 2013

18 Share-based Payments (continued)
The Company issued 3,710,000 unlisted options on 18 May 2012 to Carina Energy LLC (“Carina”) with an exercise
price of $0.025 per option on or before 31 March 2014 in consideration for the progressive acquisition of the
Delta Oil Project. The fair value calculated of $89,027 for these twenty two 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 ($0.04), expected volatility of the share price (90%) and the risk-free interest
rate (2.45%).
The Company issued the following Performance Options on 18 May 2012 to Carina Energy LLC:
Class B Performance Options
The Company issued 5,565,000 Class B Performance Options expiring no later than 5pm on the 30 April 2013.
These options can be exercised if the Delta Oil Project is farmed out by the Company to a reputable third party (to
include drilling obligations) by no later than 5pm WST on the 31 August 2012.
The Company determined that it was “less likely” rather than “more likely” that the performance milestone would be
achieved due to the short timeframe to complete the requirements.
A value of zero was given to this class of options.
Class C Performance Options
The Company issued 2,968,000 Class C Performance Options expiring no later than 5pm on the 30 April 2013.
These options can be exercised if the Delta Oil Project is farmed out by the Company to a reputable third party (to include
drilling obligations) to target a deeper than 10,000 foot horizon by no later than 5pm WST on the 31 August 2012.
The Company determined that it was “less likely” rather than “more likely” that the performance milestone would be
achieved due to the short timeframe to complete the requirements.
A value of zero was given to this class of options.
Class D Performance Options
The Company issued 4,823,000 Class D Performance Options expiring no later than 5pm on the 31 October 2013.
These options can be exercised if the Company acquires at least 5,000 net acres of additional oil & gas leases
(introduced by Carina 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 due to the longer timeframe to complete the requirements and the availability of additional acres in the area.
A Black-Scholes valuation was completed for the progressive issue. The fair value calculated of $188,261 for these
seventeen month options at the date of issue was independently determined using the Black-Scholes option pricing
model that takes into account the exercise price ($0.001), the share price at grant date ($0.04), expected volatility of
the share price (90%) and the risk-free interest rate (2.45%).
Class E Performance Options
The Company issued 4,823,000 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 5,565,000 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.
SUN RESOURCES ANNUAL REPORT 2013 68
NOTES TO AND FORMING PART OF THE CONSOLIDATED
FINANCIAL STATEMENTS