NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
 
NOTE 6 – GAIN ON SALE OF NON-CURRENT ASSETS continued  
 
Disposals in 2013 
In the fourth quarter of 2013, the Company sold all of its interests in the Phoenix  prospect, located in the Williston 
Basin, for gross proceeds of $39.8 million .  I t was determined that approximately $26.0 million of the Company’s 
carrying costs related to its Phoenix development and production properties at the time of the disposal. The sale 
resulted in a pre -tax gain of $8.2 million, which is included in the gain on sale of non -current assets in the 
consolidated statement of profit or loss and other comprehensive income for the year ended 31 December 2013.   
During 2014, the Company finalized adjustments to the purchase price for the Phoenix sale, which resulted in a net 
reduction of $0.9 million, which is included  in the gain on sale of non -current assets in the consolidated statement 
of profit or loss and other comprehensive income for the year ended 31 December 2014. 
 
The Company deferred majority of the taxable gain on the sale of the Phoenix development by acquiring qualified 
replacement properties or utilizing IDCs from its development program.   
 
NOTE 7 – INCOME TAX EXPENSE  
 2014 2013 
Year ended 31 December US$’000 US$’000 
   
a) The components of income tax expense comprise:   
 Current tax benefit/(expense) (17)        21,398 
 Deferred tax benefit/(expense)            858      (26,965) 
Total income tax benefit/(expense)            841        (5,567) 
   
b) The prima facie tax on income from ordinary activities   
before income tax is reconciled to the income tax as follows:   
   
Profit before income tax      14,480        21,509 
   
Prima facie tax expense at the Group’s statutory    
income tax rate of 30% (2013:30%) 4,344          6,453 
   
Increase (decrease) in tax expense resulting from:   
   
- Difference of tax rate in US controlled entities 220 1,607 
- Impact of direct accounting from US controlled entities (1) (3,044) 72 
- Employee options 428 - 
- Excess depletion (489) - 
- Other allowable items 295 144 
- Tax adjustments relating to prior years (1,063) (984) 
- Change in apportioned state tax rates in US controlled 
entities (2) (992) (1,520) 
- Tax consolidation election (3) (3,058) - 
- Change in unrecognized tax losses           2,518           (205) 
   
Total Income tax (benefit)/expense            (841)          5,567 
- 76 -