Interim Results

Echo Energy PLC

29 September 2023

 

Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under The Market Abuse Regulation (EU 596/2014) pursuant to the Market Abuse (Amendment) (EU Exit) Regulations 2018. Upon the publication of this announcement via a Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain.

29 September 2023

Echo Energy plc

("Echo Energy", "Echo" or the "Company")

Interim Results 2023

Echo Energy PLC is pleased to announce its Interim Results for the period ended 30 June 2023.

Chairman's and Chief Executive Officer's Statement

In the 2022 Annual Report, released at the same time as this 2023 Interim Report, the following statement was made.

"Echo Energy, similar to many companies in the oil and gas sector, faced exceptional challenges during recent years, with the global pandemic impacting all aspects of the Company's operations and finances in Argentina. The Company emerged from the COVID-19 period (during which the assets were sub economic) with a large creditor position, 100%+ per annum inflation in Argentina and Argentine currency exchange controls, which have prevented funds being withdrawn from the country without significant penalties. As a result of these factors, the raising of additional equity for an Argentine business was challenging and the Company took the decision in November 2022 to partially sell its Santa Cruz Sur portfolio.

This partial sale enabled to the Company to:

·      Address its near-term funding challenges by providing near-term cash, enabling the Company to transfer to buyers the significant in-country creditors which had built up during the COVID-19 period and providing access to funding for the Santa Cruz assets.

·      Benefit from continued exposure (both directly through the retained 5% working interest, the contingent payments, the further 5% option and the indirect holding in the Operator) to a well-funded Santa Cruz portfolio, with the concessions likely to be extended as a result of the provision of guarantee.

The Company, now with significantly reduced creditors and a heavily reduced cost base, sits with a 5% interest in a producing Santa Cruz Sur portfolio and an equity position in the operator InterOil Exploration and Production ASA. In addition to the divestment, the Company successfully completed a restructuring of its legacy debt position, converting the majority of previously outstanding debt into equity, substantially improving the balance sheet and providing the additional flexibility to best manage the financial requirements going forward. The Board see significant opportunities at this point in the economic cycle to secure new energy assets at attractive valuations and is currently exploring a number of these opportunities. "

In addition, the directors draw attention to the Accounting Policy notes regarding Going Concern, Estimates and the previous audit.

James Parsons	Martin Hull
Chairman	Chief Executive Officer

For further information, please contact:

Echo Energy Martin Hull, Chief Executive Officer via Vigo Consulting	Cavendish Securities (Nominated Adviser) Adrian Hadden Ben Jeynes [phone]
Vigo Consulting (PR Advisor) Patrick d'Ancona Finlay Thomson Kendall Hill  [phone]	Zeus  plc (Corporate Broker) Simon Johnson + 44 (0) 203 829 5000

Financial Statements

Consolidated Statement of Comprehensive Income

Period ended 30 June 2023

	Notes	Unaudited 1 January 2023 to 30 June 2023 US $	Unaudited 1 January 20222 to 30 June 2022 US $	Audited Year to 31 December 2022 US $
Continuing operations
Revenue	3	-	6,230,288	86
Cost of sales	4	-	(7,256,796)	-
Gross (loss)/profit		-	(1,026,508)	86
Exploration expenses		-	(143,545)	-
Administrative expenses		(857,722)	(1,125,073)	(2,951,806)
Operating loss		(857,722)	(2,295,126)	(2,951,720)
Financial income	5	175,311	2,161,898	1,618,844
Financial expense	6	(77,263)	(1,834,643)	(2,981,409)
Loss before tax		(759,654)	(1,967,871)	(4,314,285)
Taxation	8	-		62,477
Loss from continuing operations		(759,654)	(1,967,871)	(4,382,427)
Loss after taxation for the year from discontinued operations	10	(5,818,517)	-	(5,204,409)
Gain on sale of discontinued operations		17,115,930	-	-
Profit/(loss) for the period		10,537,759	(1,967,871)	(9,586,836)
Other comprehensive income:
Exchange difference on translating foreign operations		-	26,834	-
Total comprehensive profit/(loss) for the period		10,537,759	(1,941,036)	(9,586,836)
Profit/(loss) attributable to: Owners of the parent		10,537,759	(1,941,036)	(9,586,836)
Total comprehensive profit/(loss) attributable to: Owners of the parent		10,537,759	(1,941,036)	(9,586,836)
Profit/(loss) per share (cents)	9
Basic		0.19	(0.14)	(0.50)
Diluted		0.19	(0.14)	(0.50)
Profit/(loss) per share (cents) for continuing operations
Basic		0.19	(0.14)	(0.27)
Diluted		0.19	(0.14)	(0.27)

The notes form an integral part of these financial statements.

Consolidated Statement of Financial Position

Period ended 30 June 2023

	Notes	Unaudited 1 January 2023 to 30 June 2023 US $	Unaudited 1 January 2022 to 30 June 2022 US $	Audited Year to 31 December 2022 US $
Non-current assets
Property, plant and equipment	11	2,299	2,668,770	2,299
Other intangibles	12	-	6,662,805	-
Available-for-sale financial assets	13	555,562	-	-
		557,861	9,331,575	2,299
Current Assets
Inventories		-	1,415,225	-
Other receivables		349,590	3,566,742	769,551
Cash and cash equivalents	14	994,504	1,314,969	1,132,616
		1,344,094	6,296,936	1,902,166
Assets of group held for resale	10		-	18,739,291
Total assets		1,901,955	15,648,511	20,643,756
Current Liabilities
Trade and other payables		(1,661,557)	(19,511,235)	(1,329,991)
		(1,661,557)	(19,511,235)	(16,023,500)
Liabilities of disposal group held for resale		-	-	(29,620,264)
Non-current liabilities
Loans due in over one year	17	(5,341,036)	(28,031,316)	(5,463,301)
Provisions		-	(3,039,911)	-
Total Liabilities		(7,002,593)	(50,582,462)	(36,413,556)
Net Liabilities		(5,100,638)	(34,953,951)	(15,769,800)
Equity attributable to equity holders of the parent
Share capital	15	19,893,385	7,686,151	19,795,863
Shares not issued		-	-	97,523
Share premium	16	83,790,504	64,884,556	83,790,504
Capital contribution reserve		7,212,492	-	7,212,492
Warrant reserve		260,201	12,589,970	1,433,428
Share option reserve		644,560	1,522,499	644,560
Foreign currency translation reserve		(3,481,041)	(3,504,752)	(3,481,041)
Retained earnings		(113,420,740)	(118,132,375)	(125,263,129)
Total Equity		(5,100,638)	(34,953,951)	(15,769,800)

The notes form an integral part of these financial statements.

Consolidated Statement of Changes in Equity

Period ended 30 June 2023

	Retained earnings US $		Share capital US $		Shares to be issued US$	Share premium US $	Capital contribution reserve US$	Warrant reserve US $	Share option reserve US $	Foreign currency translation reserve US $	Total equity US $
1 January 2023	(125,263,129)		19,795,863		97,523	83,790,504	7,212,492	1,433,428	644,560	(3,481,041)	(15,769,800)
Loss for the period	(759,654)		-		-	-	-	-	-	-	(759,654)
Discontinued operations	(5,818,517)		-		-	-	-	-	-	-	(5,818,517)
Profit on sale of discontinued business	17,115,930		-		-	-	-	-	-	-	17,115,930
Total comprehensive loss for the period	10,048,159		-		-	-	-	-	-	-	10,048,159
Warrants lapsed	1,071,987		-		-	-	-	(1,071,987)	-	-	-
Warrants exercised	101,239		-		-	-	-	(101,239)	-	-	-
Share issue			97,523		(97,523)	-	-	-	-	-	-
30 June 2023	(113,420,740)		19,893,385		-	83,790,504	7,212,492	260,201	644,560	(3,481,041)	(5,100,638)
1 January 2022	(116,164,504)		7,209,086			64,977,243	--	12,177,786	1,522,499	(3,531,587)	(33,809,477)
Loss for the period	(1,967,871)		-		-	-	-	-	-	-	(1,967,871)
Exchange Reserve	-		-		-	-	-	-	-	26,835	26,835
Total comprehensive loss for the period	(1,967,871)		-		-	-	-	-	-	26,835	(1,941,036)
Warrants issued	-		433,696		-	400,735	-	-	-	-	834,431
Share issue	-		-		-	(412,184)	-	412,184	-	-	-
Transaction costs	-		43,369			(81,238)	--	-	-	-	(37,869)
30 June 2022	(118,132,375)		7,686,152		-	64,884,556	-	12,589,970	1,522,499	(3,504,752)	(34,953,951)

Consolidated Statement of Changes in Equity (continued)

Period ended 30 June 2023

	Retained earnings US $	Share capital US $	Shares to be issued US$	Share premium US $	Capital contribution reserve US$	Warrant reserve US $	Share option reserve US $	Foreign currency translation reserve US $	Total equity US $
1 January 2022	(116,164,504)	7,209,086	-	64,977,243		12,177,786	1,522,499	(3,531,587)	(33,809,477)
Loss for the period	(4,382,425)	-	-	-	-		-	-	(4,382,425)
Discontinued operations	(5,204,409)	-	-			-	-		(5,204,409)
Exchange Reserve	-		-	-	-	-	-	50,546	50,546
Total comprehensive loss for the period	(9,586,834)	-	-	-	-	-	-	50,546	(9,536,288)
New shares issued	-	12,586,777	-	7,521,415	-	-	-	-	20,108,192
Capital contribution on debt restructuring	-	-	-	--	- 7,212,492	--	-		- 7,212,492
Cash received for shares not issued	-	-	97,523	-	-	-	-	-	97,523
Warrants lapsed	-	-	-	11,291,846		(11,291,846)	-	-	-
Share options lapsed	1,035,696	-	-	-	-	-	(1,035,696)	-	-
Share based payments	-	-		-		-	157,757	-	157,757
31 December 2022	(125,263,129)	19,795,863	97,523	83,790,504	7,212,492	1,433,428	644,560	(3,481,041)	(15,769,800)

The notes form an integral part of these financial statements.

Consolidated Statement of Cash Flows

Period ended 30 June 2023

	Unaudited 1 January 2023 to 30 June 2023 US $	Unaudited 1 January 2022 to 30 June 2022 US $	Year to 31 December 2022 US $
Cash flows from operating activities
Profit/(loss) from continuing operations	(759,654)	(1,967,871)	(4,382,425)
Loss from discontinued operations			(5,204,409)
	(759,654)	(1,967,871)	(9,586,834)
Adjustments for:
Depreciation and depletion of property, plant and equipment	-	8,449	16,537
Depreciation and depletion of intangible assets	-	503,706	1,419,193
Impairment of intangible assets and goodwill	-	-	506.818
Share-based payments	-	-	157,757
Sale of interest in joint venture for non-cash consideration	(555,562)	-	-
Financial income	-	(2,161,898)	-
Financial expense	77,263	1,834,643	2,980,994
Exchange difference	(141,286)	(171,072)	(1,582,441)
	(1,379,239)	13,828	3,498,858
Increase)/decrease in inventory	-	(50,000)	863,196
Decrease in other receivables	259,128	657,790	978,758
Increase in trade and other payables	(150,932)	1,371,642	2,150,092
	108,196	1,979,432	3,992,046
Net cash used in operating activities	(1,271,043)	25,389	(2,095,912)
Cash flows from investing activities
Purchase of intangible assets	-	(34,604)	(61,233)
Purchase of property, plant and equipment	-	(2,813)	(217,578)
Sale of interests in joint venture	1,133,172
Net cash used in investing activities	1,133,172	(37,417)	(278,811)
Cash flows from financing activities
Interest received	-	26	-
Bank fees and other finance cost	-	(42,276)	-
Issue of share capital	-	834,430	2,714,574
Share issue costs	-	(37,867)	-
Net cash from financing activities	-	754,313	2,714,574
Net (decrease)/increase in cash and cash equivalents	(137,871)	742,286	339,853
Cash and cash equivalents at the beginning of the period	1,132,375	742,339	742,339
Foreign exchange gains/(losses) on cash and cash equivalents	-	(169,655)	50,447
Cash and cash equivalents at the end of the period	994,504	1,314,969	1,132,375

The notes form an integral part of these financial statements.

Notes to the Financial Statements

Period ended 30 June 2023

1. Accounting Policies          

General Information

These financial statements are for Echo Energy plc ("the Company") and subsidiary undertakings ("the Group"). The Company is registered, and domiciled, in England and Wales and incorporated under the Companies Act 2006.

Basis of Preparation

The condensed and consolidated interim financial statements for the period from 1 January 2023 to 30 June 2023 and have been prepared in accordance with International Accounting Standards ("IAS") 34 Interim Financial Reporting, and on the going concern basis. They are in accordance with the accounting policies set out in the statutory accounts for the year ended 31 December 2022 and are expected to be applied for the year ending 31 December 2023.

The comparatives shown are for the period 1 January 2022 to 30 June 2022, and for the year ended 31 December 2022, and do not constitute statutory accounts, as defined in section 435 of the Companies Act 2006, but are based on the statutory financial statements for the year ended 31 December 2022.

A copy of the Company's statutory accounts for the year ended 31 December 2022 is being delivered to the Registrar of Companies; the accounts will very soon be available to download from the Company website at www.echoenergyplc.com.

Going Concern              

The financial information has been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.

The consolidated statement of financial position at 31 December 2022 showed a negative net asset position. Moreover, after persistent difficulties, the board made the difficult decision in late 2022 to divest of its operating assets in Argentina. This decision came to fruition in June 2023 when, apart from a small 5% retention holding, Echo Energy sold its interest in the SCS assets to its joint venture partner and obtained a full, 100%, indemnity against any future costs arising from those SCS operations.

The cash received from that sale was sufficient to partly, but not fully, pay down backlog creditors. Further, the delay in publishing the December 2022 Annual Report gave rise to an automatic suspension of the trading in the company's shares on AIM, preventing any equity fund raising until the Annual Report is published and the suspension lifted.

Nevertheless, the directors have held positive discussions with potential financial intermediaries with a view to raise additional funding and also are in advanced negotiations to acquire a number of assets including outside South America to replace the SCS assets.

Going Concern

Consequently, the directors consider the going concern assumption continues to be appropriate although there remain material uncertainties as to;

1.    Successfully raising sufficient funds.

2.    Finding an appropriate investment within a suitable timescale

3.    That investment being sufficiently cash-positive to fund the Group going forwards.

Estimates

The preparation of the interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this condensed interim financial information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to consolidated financial statements for the year ended 31 December 2022. The key sources of uncertainty in estimates that have a significant risk of causing material adjustment to the carrying amounts of assets and liabilities, within the next financial year, are the Group's going concern assessment.

Previous Audit

For reasons set out therein, the auditors did not express an opinion in their report on the accounts for the year ended 31 December 2022.

In addition to the December 2022 balance sheet forming the starting point for these accounts to 30 June 2023, similar difficulties have manifested themselves in obtaining information relating to the operations in Argentina for the preparation of the interim accounts to June 2023. As a result certain figures contained herein are necessarily based on estimates

Accordingly, the directors have taken a  prudent view in evaluating certain figures, including but not limited to the assets and liabilities retained in Argentina, particularly trade debtors and tax assets and liabilities, following the completion of the sale of the majority of its interests there.

Revenue Recognition

Revenue comprises the invoice value of goods and services supplied by the Group, net of value added taxes and trade discounts. Revenue is recognised in the case of oil and gas sales when goods are delivered and title has passed to the customer. This generally occurs when the product is physically transferred into a pipeline or vessel. Echo recognised revenue in accordance with IFRS 15. We have a contractual arrangement with our joint venture partner who markets gas and crude oil on our behalf. Gas is transferred via a metred pipeline into the regional gas transportation system, which is part of the national transportation system, control of the gas is transferred at the point at which the gas enters this network, this is the point at which gas revenue is recognised. Gas prices vary from month to month based on seasonal demand from customer segments and production in the market as a whole. Our partner agrees pricing with their portfolio of gas clients based on agreed pricing mechanisms in multiple contracts. Some pricing is regulated by government such as domestic supply. Echo receive a monthly average of gas prices attained. Oil shipments are priced in advance of a cargo and revenue is recognised at the point at which cargoes are loaded onto a shipping vessel at terminal.

2. Business Segments  

The Group has adopted IFRS 8 Operating Segments. Per IFRS 8, operating segments are regularly reviewed and used by the board of directors being the chief operating decision maker for strategic decision-making and resources allocation, in order to allocate resources to the segment and assess its performance.

At the balance sheet date, there is only one business segment, being the company, its activity disclosed in within continuing operations.

Activity in Argentina, being the Santa Cruz Sur operations, are set out within discontinued operations within note 10.

Activity within the group's Bolivian subsidiary is immaterial.

3. Revenue

	Unaudited 1 January 2023 to 30 June 2023 US $	Unaudited 1 January 2022 to 30 June 2022 US $	Audited Year to 31 December 2022 US $
Oil revenue	-	2,514,419	-
Gas revenue	-	3,715,668	-
Other income	-	201	86
Total Revenue	-	6,230,288	86

Revenue for December 2022 and 2023 all derives from discontinued operations held for resale and is shown in Note 10. At June 2022, those operations had not been discontinued.

4. Cost of Sales

	Unaudited 1 January 2023 to 30 June 2023 US $	Unaudited 1 January 2022 to 30 June 2022 US $	Audited Year to 31 December 2022 US $
Production costs	-	5,870,851	-
Selling and distribution costs	-	928,235	-
Movement in stock of crude oil	-	(50,000)	-
Depletion	-	507,710	-
Total Costs	-	7,256,796	-

Revenue for December 2022 and 2023 all derives from discontinued operations held for resale and is shown in Note 10. At June 2022, those operations had not been discontinued.

5. Finance Income

	Unaudited 1 January 2023 to 30 June 2023 US $	Unaudited 1 January 2022 to 30 June 2022 US $	Audited Year to 31 December 2022 US $
Interest income	-	340	622
Net foreign exchange gains	175,331	2,161,558	1,618,222
Total	175,331	2,161,898	1,618,884

 6. Financial Expense

	Unaudited period to 30 June 2023 US $	Unaudited period to 30 June 2022 US$	Audited Year to 31 December 2022 US $
Interest payable	-	227	415
Net foreign exchange losses	-	432,660	-
Unwinding of discount on long term loan	77,263	1,272,735	2,598,746
Amortisation of loan fees	-	86,745	234,101
Bank fees and overseas transaction taxes	-	42,276	-
Total	77,263	1,834,643	8,993,432

7. Taxation

The Group has tax losses available to be carried forward in certain subsidiaries and the parent company. Due to uncertainty around timing of the Group's projects, management have not considered it appropriate to anticipate an asset value for them. No tax charge has arisen during the six-month period to 30 June 2023, or in the six-month period to June 2022, or the year to 31 December 2022.

8. Loss Per Share

The calculation of basic and diluted loss per share at 30 June 2023 was based on the loss attributable to ordinary shareholders. The weighted average number of ordinary shares outstanding during the period ended 30 June 2023 and the effect of the potentially dilutive ordinary shares to be issued are shown below.

	Period to 30 June 2023	Period to 30 June 2022	Year to 31 December 2022
Net profit/(loss) for the year (US $)	10,537,759	(1,967,871)	(9,586,834)
Basic weighted average ordinary shares in issue during the period	5,527,427,674	1,440,666,214	1,909,205,746
Diluted weighted average ordinary shares in issue during the period	5,527,427,674	1,440,666,214	1,909,205,746
Loss per share (cents)
Basic	0.19	(0.14)	(0.27)
Diluted	0.19	(0.14)	(0.27)

9. Discontinued Operations

In November 2022 the company committed to selling virtually all of its interest in the Santa Cruz oil and gas operations in Argentina to its joint-venture partner Interoil. A term of the sale was for Echo to relinquish any management and accounting in respect of the joint venture, instead receiving a profit share in proportion to the remaining 5% holding in the joint venture, effectively as investment income.
The sale was completed on 26 June 2023, satisfied by £825,000 in cash, shares to the value of £400,000 in Interoil and £150,000 investment in Echo Energy PLC shares by Interoil. At 31 December 2022 the Argentinian operations were classified as a disposal group held for sale and as discontinued operations.

The results of the Argentinian operations for the period are presented below

	Period to 30 June 2023 US $	Period to 30 June 2022 US$	Year to 31 December 2022 US $
Oil and gas revenue	3,632,389	-	14,114,331
Cost of sales		-
Production costs	(7,912,008)	-	(16,933,985)
Depletion	-	-	(1,419,193)
Total cost of sales	(7,912,008)	-	(18,353,178)
Gross loss		-	(15,147,779)
Exploration expenses	-	-	(287,919)
Impairment of plant and equipment	-	-	(506,818)
Administrative expenses	(490,245)	-	(578,011)
Operating loss from discontinued activities	(4,769,864)	-	(5,611,595)
Finance revenue		-	-
Finance expense	`(4,157,561)	-	(788,847)
Foreign exchange gain	3,413,143	-	1,208,083
Loss for the period before taxation from discontinued operations	(5,818,517)	-	(5,192,359)
Deferred tax asset write-off	-	-	(12,050)
Loss for the period after taxation from discontinued operations	(5,818,517)	-	(5,204,409)

The major classes of assets and liabilities of the Argentinian operations classified as held for sale as at 31 December 2022 were as follows

			As at 31 December 2022 US $
Property, plant and equipment			2,658,382
Intangible assets			5,267,129
Inventories			716,794
Joint venture receivables			9,729,937
Other receivables			279,012
Prepayments			87,916
Cash			121
Assets of disposal group held for sale			18,739,291
Liabilities
Trade and other payables			(14,095)
Joint venture payables			26,594,448
Provisions			3,039,911
Liabilities of disposal group held for sale			29,620,264
Net liabilities			(10,880,794)

10. Property, Plant and Equipment

	PPE - O&G Properties US $	Fixtures & Fittings US $	Total US $
30 JUNE 2023
Cost
1 January 2023	-	98,210	98,210
Additions	-	-	-
Disposals	-	-	-
30 June 2023	-	98,210	98,210
Depreciation
1 January 2023	-	95,911	95,911
Charge for the period	-	-	-
Disposals	-	-	-
30 June 2023	-	95,911	95,911
Carrying amount
30 June 2023	-	2,299	2,299
30 JUNE 2022
Cost
1 January 2022	2,873,147	95,397	2,968,544
Additions	-	2,813	2,813
Disposals	-	-	-
30 June 2022	2,873,147	98,210	2,971,357
Depreciation
1 January 2022	202,718	91,421	294,139
Charge for the period	4,004	4,445	8,449
Disposals	-	-	-
30 June 2022	206,722	95,866	302,588
Carrying amount
30 June 2021	2,666,425	2,344	2,668,769
31 DECEMBER 2022
Cost
1 January 2022	2,873,147	95,397	2,968,544
Additions	-	2,813	2,813
Reclassification of assets of disposal group held for sale (note 10)	(2,873,147)	(1,858)	(2,873,147)
31 December 2022	-	98,210	98,210
Depreciation
1 January 2021	202,718	91,421	294,139
Charge for the year	12,047	4,490	16,337
Reclassification of assets of disposal group held for sale (note 10)	(214,765)	-	(214,765)
31 December 2022	-	95,911	95,911
Carrying amount
31 December 2022	-	2,299	2,299
31 December 2021	2,541,980	3,976	2,674,405

11. Intangible Assets

	Argentina Exploration & Evaluation US $
30 June 2023
Cost
1 January 2023	-
Additions	-
Disposals	-
30 June 2023	-
Impairment
1 January 2023	-
Depletion	-
Depreciation decommissioning assets	-
Impairment charge for the period	-
30 June 2023	-
Carrying amount
30 June 2023	-
30 JUNE 2022
Cost
1 January 2022	10,875,022
Additions	34,604
Disposals	-
30 June 2022	10,909,626
Impairment
1 January 2022	3,743,115
Depletion	443,706
Depreciation decommissioning assets	60,000
Impairment charge for the period	-
30 June 2021	4,246,821
Carrying amount
30 June 2022	6,662,805
30 June 2021	7,773,210
31 DECEMBER 2022
Cost
1 January 2022	10,875,022
Additions	61,233
Reclassification of assets of disposal group held for sale (note 10)	(10,429,437)
31 December 2022	506,818
Impairment
1 January 2022	3,743,115
Disposals	-
Depletion	1,419,193
Impairment charge for the year	506,818
Reclassification of assets of disposal group held for sale (note 10)	(5,162,308)
31 December 2022	506,818
Carrying amount
31 December 2022	-
31 December 2021	7,131,907

12. AVAILABLE-FOR-SALE FINANCIAL ASSETS.

The company retains a passive 5% minority stake in the joint venture in Argentina, the valuation being based on the achieved price on the sale of the majority, discounted to reflect the minority status. The company intends to hold this investment for the medium-to-long term.

13. Cash and Cash Equivalents

	Unaudited At 30 June 2023	Unaudited At 30 June 2022	Audited 31 December 2022
	US $	US $	US $
Cash held by joint venture partners	-	54,604	-
Cash and cash equivalents	994,504	1,260,365	1,132,616
Total	994,504	1,314,969	1,132,616

14. Share Capital

	Unaudited At 30 June 2023	Unaudited At 30 June 2022	Audited 31 December 2022
	US $	US $	US $
Issued, Called Up and Fully Paid
5,560,618,550.32¢ (June 2022: 1,452,491,345 0.32¢) ordinary shares
1 January	19,795,863	7,209,086	7,209,086
Equity shares issued	97,523	477,065	12,586,777
30 June / 31 December	19,893,385	7,686,151	19,795,863

The holders of 0.32c (0.25p) ordinary shares are entitled to receive dividends from time to time and are entitled to one vote per share at meetings of the Company.

During the six-month period to 30 June 2023, 97,523 shares were issued.

15. Share Premium Account

	Unaudited At 30 June 2023	Unaudited At 30 June 2022	Audited 31 December 2022
	US$	US $	US $
1 January	83,790,504	64,977,243	64,977,243
Premium arising on issue of equity shares/warrants	-	400,735	7,521,415
Warrants Issued	-	(412,184)	11,291,846
Transaction costs	-	(81,238)	-
30 June	83,790,504	64,884,556	83,790,504

16. Loans (due over 1 year)

				Unaudited At 30 June 2023	Unaudited At 30 June 2022	Audited 31 December 2022
Five-year secured bonds				(4,000,154)	(20,909,700)	(4,170,086)
Additional net funding				-	(5,871,466)	(6,059,126)
Other loans				(1,340,882)	(1,250,150)	(1,293,215)
Total				(5,341,036)	(28,031,316)	(5,463,301)
	Balance as at 31 December 2022 US $		Amortised finance charges less cash interest paid US $	Repayment of principle US$	Exchange adjustments US $	30 June 2022 US$
€20 million five-year secured bonds		4,170,086	44,188	-	(214,120)	4,000,154
Other loans	1,293,215		33,075	-	14,592	1,340,882
Total	5,463,301		77,263		(199,528)	5,341,036

 

END