TIDMECHO

RNS Number : 2316O

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100%+ per annum inflation in Argentina and Argentine currency exchange controls, which have prevented funds being withdrawn from the country without significant penalties.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                            C avendish Securities 
 Martin Hull, Chief Executive Officer   (Nominated Adviser) 
 via Vigo Consulting                    Adrian Hadden 
                                        Ben Jeynes 
                                        +44 (0) 20 7397 8900 
Vigo Consulting (PR Advisor)           Zeus plc (Corporate Broker) 
 Patrick d'Ancona                       Simon Johnson 
 Finlay Thomson                         + 44 (0) 203 829 5000 
 Kendall Hill 
 +44 (0) 20 7390 0230 
 
 
 

Financial Statements

Consolidated Statement of Comprehensive Income

Period ended 30 June 2023

 
                                                      Unaudited          Unaudited         Audited 
                                                 1 January 2023    1 January 20222         Year to 
                                                     to 30 June    to 30 June 2022     31 December 
                                        Notes              2023               US $            2022 
                                                           US $                               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                        17,115,930                  -               - 
  operations 
 Profit/(loss) for the 
  period                                             10,537,759        (1,967,871)     (9,586,836) 
 Other comprehensive income: 
 Exchange difference on                                       -             26,834               - 
  translating foreign operations 
-----------------------------------  --------  ----------------  -----------------  -------------- 
 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

 
                                                  Unaudited                   Unaudited         Audited 
                                                  1 January                   1 January         Year to 
                                                       2023                        2022     31 December 
                                      Notes      to 30 June                  to 30 June            2022 
                                                       2023                        2022            US $ 
                                                       US $                        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

 
                                                                                                                                Foreign 
                                                                                        Capital                     Share      currency 
                                Retained          Share     Shares        Share    contribution       Warrant      option   translation 
                                earnings        capital      to be      premium         reserve       reserve     reserve       reserve          Total 
                                    US $           US $     issued         US $             US$          US $        US $          US $         equity 
                                                               US$                                                                                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

 
                                                                                                                       Foreign 
                                                                            Capital                        Share      currency 
                       Retained        Share    Shares        Share    contribution        Warrant        option   translation 
                       earnings      capital     to be      premium         reserve        reserve       reserve       reserve          Total 
                           US $         US $    issued         US $             US$           US $          US $          US $         equity 
                                                   US$                                                                                   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        Unaudited 
                                            1 January        1 January         Year to 
                                                 2023             2022     31 December 
                                           to 30 June       to 30 June            2022 
                                                 2023             2022            US $ 
                                                 US $             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          (555,562)                -               - 
  for non-cash consideration 
  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. R evenue

 
                     Unaudited     Unaudited        Audited 
                     1 January     1 January        Year to 
                          2023          2022    31 December 
                    to 30 June    to 30 June           2022 
                          2023          2022           US $ 
                          US $          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     Unaudited        Audited 
                                1 January     1 January        Year to 
                                     2023          2022    31 December 
                               to 30 June    to 30 June           2022 
                                     2023          2022           US $ 
                                     US $          US $ 
 Production costs                       -     5,870,851              - 
 Selling and distribution               -       928,235              - 
  costs 
 Movement in stock of crude             -      (50,000)              - 
  oil 
 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     Unaudited        Audited 
                                 1 January     1 January        Year to 
                                      2023          2022    31 December 
                                to 30 June    to 30 June           2022 
                                      2023          2022           US $ 
                                      US $          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       Unaudited        Audited 
                                        period to       period to        Year to 
                                          30 June    30 June 2022    31 December 
                                             2023             US$           2022 
                                             US $                           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             -          42,276              - 
  taxes 
------------------------------------  -----------  --------------  ------------- 
 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       Period to         Year to 
                                            30 June         30 June     31 December 
                                               2023            2022            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 GBP825,000 in cash, shares to the value of GBP400,000 in Interoil and GBP150,000 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       Period to         Year to 
                                       30 June 2023    30 June 2022     31 December 
                                               US $             US$            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       Fixtures 
                       Properties     & Fittings         Total 
                             US $           US $          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     Unaudited        Audited 
                                         At 30 June    At 30 June    31 December 
                                               2023          2022           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      Unaudited         Audited 
                                                 June 2023     At 30 June     31 December 
                                                                     2022            2022 
                                                      US $           US $            US $ 
---------------------------------------------  -----------  -------------  -------------- 
 Issued, Called Up and Fully Paid 
 5,560,618,550.32c (June 2022: 1,452,491,345 
  0.32c) 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     Unaudited        Audited 
                                        At 30 June    At 30 June    31 December 
                                              2023          2022           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 
                                                                   Unaudited      At 30 June         Audited 
                                                                  At 30 June            2022     31 December 
                                                                        2023                            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) 
------------------------  ----------------  -----------------  -------------  --------------  -------------- 
                                                    Amortised      Repayment 
                                Balance as    finance charges             of        Exchange 
                                        at          less cash      principle     adjustments         30 June 
                               31 December           interest                           US $            2022 
                                      2022               paid            US$                             US$ 
                                      US $               US $ 
------------------------  ----------------  -----------------  -------------  --------------  -------------- 
 EUR 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 
------------------------  ----------------  -----------------  -------------  --------------  -------------- 
 
 
 

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September 29, 2023 11:50 ET (15:50 GMT)

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