ECHO Echo Energy Plc

Notes to the Financial Statements for the Year Ended 31 December 2023

1. General Information

These financial statements are for Echo Energy plc ("the Company") and subsidiary undertakings ("the Group"). The company is a public company limited by share capital, incorporated and domiciled in England and Wales. The company was incorporated under the Companies Act 2006.

The Company's functional current is the United States dollar (US $). Transactions arising in currencies other than the US $ are translated at average exchange rates for the relevant accounting period, with material transactions being accounted for at the rate of exchange on the date of the transaction.

The Group presents its financial information in US $. The results and position of subsidiary undertakings that have a different functional currency to US $ are treated as follows:

-      Assets and liabilities for each financial reporting date presented are translated at the closing rate of that financial reporting period.

-      Income and expenses for each income statement (including comparatives) is translated at exchange rates at the dates of transactions. For practical reasons, the Company applies straight average exchange rates for the period.

-      All resulting changes are recognised as a separate component of equity.

-      Equity items are translated at exchange rates at the date of transactions.

 

2. Accounting Policies

Statement of compliance

The group financial statements have been prepared in accordance with International Financial Reporting Standards and its interpretations adopted by the UK ("UK adopted IFRSs").

Summary of material accounting policies and key accounting estimates

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The financial statements have been prepared in accordance with adopted IFRSs and under historical cost accounting rules.

The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group's accounting policies.

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 2023 shows 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.

The directors have held positive discussions with potential investors and also are in advanced negotiations to acquire a number of natural resource projects with a range of inferred, indicated and measured resources to replace the SCS assets.

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.

Basis of consolidation

The group financial statements consolidate the financial statements of the company and its subsidiary undertakings drawn up to 31 December 2023.

A subsidiary is an entity controlled by the company. Control is achieved where the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the group.

The purchase method of accounting is used to account for business combinations that result in the acquisition of subsidiaries by the group. The cost of a business combination is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the business combination. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised is recorded as goodwill.

Inter-company transactions, balances and unrealised gains on transactions between the company and its subsidiaries, which are related parties, are eliminated in full.

Intra-group losses are also eliminated but may indicate an impairment that requires recognition in the consolidated financial statements.

 

Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group. Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the non-controlling shareholder's share of changes in equity since the date of the combination. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

A joint arrangement is one in which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Certain of the Group's licence interests are held jointly with others. Accordingly, when the company holds a majority stake, the Group accounts for its share of assets, liabilities, income and expenditure of these joint operations, classified in the appropriate statement of financial position and income statement headings.

Where the Group's interest is in a minority, relinquishing control and having only a right to profits, with an indemnity against future costs, the Group account on an investment basis, only recognising income on receipt of, effectively, dividend income .

Changes in accounting policy

None of the standards, interpretations and amendments effective for the first time from 1 January 2023 have had a material effect on the financial statements.

None of the standards, interpretations and amendments which are effective for periods beginning after 1 January 2023 and which have not been adopted early, are expected to have a material effect on the financial statements.

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. Our joint venture partner 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 national transportation system, control of the gas passes at the point at which the gas enters this network, this is the point at which gas revenue would be 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. 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.

Tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from, or paid to, the tax authorities. The tax rates and the tax laws used to compute the amount are those that are enacted, or substantively enacted, by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the current year amounts of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit.

Deferred tax assets are recognised to the extent the temporary difference will reverse in the foreseeable future and it is probable that future taxable profit will be available against which the asset can be utilised.

Deferred tax is recognised for all deductible temporary differences arising from investments in subsidiaries, branches and associates, and interests in joint ventures, to the extent it is probable that the temporary difference will reverse in the foreseeable future.

Property, plant and equipment

Property, plant and equipment is stated in the statement of financial position at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses.

The cost of property, plant and equipment includes directly attributable incremental costs incurred in their acquisition and installation.

Oil and gas properties are depleted on a unit of production basis commencing at the start of commercial production or depreciated on a straight-line basis over the relevant asset's estimated useful life. Expenditure is depreciated on a unit of production basis; the depletion charge is calculated according to the proportion that production bears to the recoverable reserves for each property. Depreciation will not be charged on an asset in the course of construction, depreciation commences when the asset is brought into use and will be depleted according to the proportion that production bears to the recoverable reserves for each property.

Depreciation

Depreciation is charged so as to write off the cost of assets, other than land and properties under construction over their estimated useful lives, as follows:

Asset class	Depreciation method and rate
Fixtures & fittings	12% to 33.3% straight line

 

Property right of use asset

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right of use lease is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before commencement date plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date discounted using the incremental borrowing rate of the individual Company which is the lessee.

Other intangible assets - exploration and evaluation costs

Exploration and evaluation (E&E) expenditure comprises costs which are directly attributable to researching and analysing exploration data. It also includes the costs incurred in acquiring mineral rights, the entry premiums paid to gain access to areas of interest and amounts payable to third parties to acquire interests in existing projects. When it has been established that a mineral deposit has development potential, all costs (direct and applicable overhead) incurred in connection with the exploration and development of the mineral deposits are capitalised until either production commences or the project is not considered economically viable. In the event of production commencing, the capitalised costs are amortised over the expected life of the mineral reserves on a unit of production basis. Other pre-trading expenses are written off as incurred. Where a project is abandoned or is considered to be of no further interest, the related costs are written off.

Impairment of tangible and intangible assets excluding goodwill

At the date of each statement of financial position, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit ("CGU") to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell or value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (CGU) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a re-valued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Business combinations

Business combinations are accounted for using the purchase method. The consideration for each acquisition is measured at the aggregate of the fair values at acquisition date of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquired, plus any costs directly attributable to the business combination. When a business combination agreement provides for an adjustment to the cost of the combination contingent on future events, the group includes the estimated amount of that adjustment in the cost of the combination at the acquisition date if the adjustment is probable and can be measured reliably.

Investments

Investments in securities are classified on initial recognition as available-for-sale and are carried at fair value, except where their fair value cannot be measured reliably, in which case they are carried at cost, less any impairment.

Unrealised holding gains and losses other than impairments are recognised in other comprehensive income. On maturity or disposal, net gains and losses previously deferred in accumulated other comprehensive income are recognised in income.

Interest income on debt securities, where applicable, is recognised in income using the effective interest method. Dividends on equity securities are recognised in income when receivable.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and call deposits.

Trade receivables

Trade receivables are amounts due from customers for goods or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at the transaction price. They are subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for the impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables.

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.

Borrowings

All borrowings are initially recorded at the amount of proceeds received, net of transaction costs. Borrowings are subsequently carried at amortised cost, with the difference between the proceeds, net of transaction costs, and the amount due on redemption being recognised as a charge to the income statement over the period of the relevant borrowing.

Interest expense is recognised on the basis of the effective interest method and is included in finance costs.

Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

Conversion of foreign currency

Foreign currency transactions are translated at the average exchange rates over the year, material transactions are recorded at the exchange rate ruling on the date of the transaction. Assets and liabilities are translated at the rates prevailing at the balance sheet date. The Group has significant transactions and balances denominated in Euros and GBP. The year-end exchange rate to USD was US $1 to GBP £0.7855 and US $1 to €0.9060 (2022: US $1 to GBP £0.8292, US $1 to €0.8869) US $1 to ARS $810.819 (2022: US $1 to ARS $147.423) and the average exchange rate during 2023 was US $1 to GBP £0.8039 (2022: US $1 to GBP £0.8019).    

In the Company financial statements, the income and expenses of foreign operations are translated at the exchange rates ruling at the dates of the transactions. The assets and liabilities of foreign operations, both monetary and non-monetary, are translated at exchange rates ruling at the balance sheet date. The reporting currency of the Company and group is United Stated Dollars (US $).

Share-based payments

The fair value of equity instruments granted to employees is charged to the income statement, with a corresponding increase in equity. The fair value of share options is measured at grant date, using the binomial option pricing model or Black-Scholes pricing model were considered more appropriate, and spread over the period during which the employee becomes unconditionally entitled to the award. The charge is adjusted to reflect the number of shares or options that vest.

The group operates an equity-settled, share-based compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the entity. The fair value of the employee services received is measured by reference to the estimated fair value at the grant date of equity instruments granted and is recognised as an expense over the vesting period. The estimated fair value of the option granted is calculated using the Black Scholes option pricing model. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.            

Inventory

Echo has chosen to value crude oil inventories, a commodity product, at net realisable value, the value is based on a discounted observable year-end market price. Other inventory items are valued at the lower of net realisable value and cost.

Share capital

Ordinary shares are classified as equity. Equity instruments are measured at the fair value of the cash or other resources received or receivable, net of the direct costs of issuing the equity instruments. If payment is deferred and the time value of money is material, the initial measurement is on a present value basis.

Financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes a party to the contractual provisions of the instrument.

Equity instruments

Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions, in accordance with IAS 32:

- They include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and

- Where the instrument will or may be settled in the Group's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Group's own equity instruments or is a derivative that will be settled by the Group exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments.

To the extent that this definition is not met, the financial instrument is classified as a financial liability.

Use of estimates and judgements

The preparation of financial statements in conforming with adopted IFRSs requires management to make judgements, estimates and assumptions that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities as at the balance sheet date and the reported amount of revenues and expenses during the period. Actual outcomes may differ from those estimates. 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 impairment of assets and the Group's going concern assessment.

 

Amounts capitalised to the consolidated statements of financial position

In accordance with the Group policy, expenditures are capitalised only where the Group holds a licence interest in an area. All expenditure relating to the Bolivian company has been expensed to the statement of comprehensive income, as the Group has not yet been assigned any licence interests in the country. The Group has capitalised its participation in the SCS assets.

Prior to the decision to dispose of the majority of its SCS interest, expenses incurred in the UK relating to SCS were capitalised. All such capitalised UK costs were then impaired to nil value following the disposal decision.

 

Valuation of assets

In line with the requirements of IFRS 5, management have considered impairment in the assets held for sale by comparing the expected fair value less costs to sell (which was agreed in {June 2023] and the carrying value of the disposal group. On the basis the fair value less costs to sell were in excess of the carrying value of the disposal group no impairments were considered necessary.

The parent company's investment in subsidiary has been written down to the fair value less costs to sell as the value achieved is indicative of the value at the balance sheet date and the majority of the activity of the subsidiaries is linked to the discontinued operations.

Management have previously impaired $506,818 of intangible assets which were costs associated with asset capitalised in the parent company. This intangible has not been disposed of but is linked to the activities of the discontinued operations and therefore have been fully impaired at 31 December 2023.

Functional currency

The groups principal activities, prior to the criteria of discontinued operation being met, are undertaken in Argentina. Judgement is required to assess to the functional currency of the groups subsidiaries. Consistent with previous years, management have determined that the functional currency is USD on the basis that revenues, a portion of the cost base and financing activities are denominated in USD. If a different judgement was made and if Argentine Peso was considered the functional currency management would need to consider the impacts of IAS 29. On the basis the activities have been discontinued this judgement will not impact the group significantly in future accounting periods.                                                                                                                                             

Settlement of financial liabilities

As detailed in note 26, during the year the company renegotiated and / or settled certain financial liabilities. These were on favourable terms to the group. Judgement is required to assess whether the counterparties to the liabilities were acting in their capacity as shareholders to the group. On the basis of the favourable terms management have determined they were acting in their capacity as shareholders and have accounted for the renegotiation or settlement accordingly as detailed in note 26.

Carrying value of investment subsidiaries

An impairment provisions has been made on the carrying value of investment in subsidiaries, writing them down to the disposal value achieved on the sale of the underlying SCS interests in June 2023.

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 SCS operations are set out within discontinued operations within note 10.

3. Discontinued operations

Disposal of SCS

On 30 June 2023, the group disposed of SCS, which formed part of the group operations. Cash flows and operations that relate to a major component of the business or geographical region that has been sold are shown separately from continuing operations.

Assets and businesses classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. No depreciation is charged on assets and businesses classified as held for sale.

Assets and businesses are classified as held for sale if their carrying amount will be recovered or settled principally through a sale transaction rather than through continuing use. This condition is regarded as being met only when the sale is highly probable and the assets or businesses are available for immediate sale in their present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Finance income or costs are included in discontinued operations only in respect of financial assets or liabilities classified as held for sale or derecognised on sale.

4. Revenue

The analysis of the group's revenue for the year from continuing operations is as follows:

	2023 US $	2022 US $
Sale of oil and gas	-	-

 

Revenue for 2023 all derives from discontinued operations held for resale and is shown in Note 10.

5. Other operating income

The analysis of the group's other operating income for the year is as follows:

		2023 US $	2022 US $
Other operating income		-	86
6. Other losses
		2023 US $	2022 US $
Other losses
Loss on disposal of fixed asset		2,298	-

 

7. Finance income and costs
		2023 US $	2022 US $
Finance income
Other finance income		3,450	622
Foreign exchange gains		-	1,618,222
Sale of option		25,462	-
Other operating income		174,459	-
Net foreign exchange gain		203,371	1,618,844
Finance costs
Fair value losses		(226,522)	-
Foreign exchange losses		(649,523)	-
Interest on bank overdrafts and borrowings		-	(415)
Interest expense on other financing liabilities		(916,292)	(2,980,994)
Total finance costs		(1,792,337)	(2,981,409)
Net finance income/(costs)		(1,588,966)	(1,362,565)
8. Expenses and auditors' remuneration
		2023 US $	2022 US $
Depreciation of property, plant and equipment		27,972	92
Fees payable to the company's auditor		31,827	60,587
Fees payable to the overseas auditor and its associates		-	10,502

 

9. Staff costs

The aggregate payroll costs (including directors' remuneration) were as follows:

	2023 US $	2022 US $
Wages and salaries	558,049	1,159,651
Social security costs	62,791	147,922
Pension costs, defined contribution scheme	25,743	37,574
Share-based payment expenses	31,735	157,757
	678,318	1,502,904

Remuneration of Key Personnel is set out in the table below:

	2023 US $	2022 US $
Wages and salaries	333,204	541,915
Social security costs	40,103	61,098
Pension costs, defined contribution scheme	6,178	12,239
Private health insurance	5,930	5,963
Share-based payment expenses	31,735	157,757
	417,150	778,972

 

 

The average number of persons employed by the group (including directors) during the year, analysed by category was as follows:

	2023 No.	2022 No.
Administration and support	8	10

 

10. Discontinued operations

In November 2022 the company committed to selling virtually all of its interest in the SCS 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 27 June 2023, satisfied by £825,000 in cash, shares to the value of £400,000 in Interoil and £75,000 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:

Revenue	2023 US $	2022 US $
Oil and Gas Revenue	3,632,393	14,114,331
Total revenue	3,632,393	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	(4,279,615)	(4,238,847)
Exploration expenses	-	(287,919)
Impairment of plant and equipment	-	(506,818)
Administrative expense	(803,530)	(578,011)
Operating loss from discontinued operations	(5,083,145)	(5,611,595)
Finance expense	(4,157,561)	(788,847)
Foreign exchange gain	(34,792)	1,208,083
Profit on disposal	18,331,373	-
Profit/(Loss) for the year before taxation from discontinued operations	9,055,875	(5,192,359)
Deferred tax asset write-off	-	(12,050)
Profit/(Loss) for the year after taxation from discontinued operations	9,055,875	(5,204,409)

 

11. Joint arrangements

As described in both the strategic and governance reports, in particular in the Financial Review, Echo had joint arrangements within the SCS concessions. Previously, the Group accounted for its share of assets, liabilities, income and expenditure of these joint operations in accordance with its equity interest in each, being 70% of the SCS working interest. Joint venture assets and liabilities were separately disclosed throughout the financial statements.

As set out in Note 10, in December 2022 to the decision was made to divest of the SCS concessions, following which, in June 2023 that interest was reduced to a 5% holding and the joint arrangement thereby has been treated in the accounts as discontinued operations.

12. Taxation
		Year to 31 December 2023 US $	Year to 31 December 2022 US $
Tax on profit on ordinary activities
Taxation charged based on profits for the period		-	-
UK corporation tax based on the results for the period		-	-
Deferred tax asset write-off in Bolivian subsidiary		-	68,142
Total tax expense in income statement		-	68,142

 

Reconciliation of the tax expenses

The tax assessed for the year is different from the standard rate of corporation tax in the UK of 19% - 25% (2022: 19%). The references are explained below:

	Year to 31 December 2023 US $	Year to 31 December 2022 US $
Loss on ordinary activities before taxation	(2,809,753)	(4,382,425)
Profit / (loss) from discontinued operations	9,055,875	(5,204,409)
Profit / (loss) for the year before tax	6,246,122	(9,586,834)
Profit / (loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 19%	1,186,763	(1,821,498)
Effects of:
Expenses disallowed for tax purposes	5,315	92
Disposal of investments	(1,720,616)
Deferred tax not provided - tax losses carried forward	528,538	1,821,406
Deferred tax asset in Bolivian subsidiary written off	-	68,142
Total current tax	-	68,142

 

The parent entity has tax losses available to be carried forward, and further tax losses are available in certain subsidiaries. With anticipated substantial lead times for the Group's projects, and the possibility that these may expire before their use, it is not considered appropriate to anticipate an asset value for them. The amount of tax losses carried forward for which a deferred tax asset has not been recognised is US $51million (2022: US $50million)

No amounts have been recognised within tax on the results of the equity-accounted joint ventures.

13. Loss per share

The calculation of basic and diluted loss per share at 31 December 2023 was based on the loss attributable to ordinary shareholders. The weighted average number of ordinary shares outstanding during the year ending 31 December 2023 and the effect of the potentially dilutive ordinary shares to be issued are shown below.

	Year to 31 December 2023	Year to 31 December 2022
Net loss for the year (US $) before exchange on translating foreign operations	6,246,122	(9,586,834)
Net loss on continuing operations	(2,809,753)	(4,382,425)
Basic weighted average ordinary shares in issue during the year	4,867,580,788	1,909,205,746
Diluted weighted average ordinary shares in issue during the year	4,867,580,788	1,909,205,746
Loss per share (cents)
Basic  and diluted (cents)	0.13	(0.50)
Loss per share on continuing operations (cents)
Basic and diluted (cents)	(0.06)	(0.23)

In accordance with IAS 33 and as the entity is loss making, including potentially dilutive share options in the calculation would be anti-dilutive.

Deferred shares have been excluded from the calculation of loss per share due to their nature. Please see Note 24 for details of their rights.

14. Loss of the parent company

The parent company is not required to produce its own profit and loss account (or IFRS equivalent) because of the exemption provision in Section 408 of the Companies Act 2006.

15. Property, plant and equipment

Group

31 December 2023	PPE - O&G Properties US $	Fixtures & Fittings US $	Total US $
Cost or valuation
At 1 January 2023	-	98,210	98,210
Disposals	-	(2,991)	(2,991)
At 31 December 2023	-	95,219	95,219
Depreciation
At 1 January 2023	-	95,911	95,911
Charge for year	-	-	-
Disposals	-	(693)	(693)
At 31 December 2023	-	95,218	95,218
Carrying amount
At 31 December 2023	-	1	1
At 31 December 2022	-	2,299	2,299

 

31 December 2022	PPE - O&G Properties US $	Fixtures & Fittings US $	Total US $
Cost or valuation
At 1 January 2022	2,873,147	95,397	2,968,544
Additions	-	2,813	2,813
Assets of disposal held for sale	(2,873,147)	-	(2,873,147)
At 31 December 2022	-	98,210	98,210
Depreciation
At 1 January 2022	202,718	91,421	294,139
Charge for year	12,047	4,490	16,537
Disposals	(214,765)	-	(214,765)
At 31 December 2022	-	95,911	95,911
Carrying amount
At 31 December 2022	-	2,299	2,299
At 31 December 2021	2,670,429	3,976	2,674,405

 

Company

31 December 2023	Fixtures & Fittings US $	Total US $
Cost or valuation
At 1 January 2023	92,903	92,903
Additions	-	-
At 31 December 2023	92,903	92,903
Depreciation
At 1 January 2023	92,902	92,902
Charge for year	-	-
Disposals	-	-
At 31 December 2023	92,902	92,902
Carrying amount
At 31 December 2023	1	1
At 31 December 2022	1	1

 

31 December 2022	Fixtures & Fittings US $	Total US $
Cost or valuation
At 1 January 2022	92,903	92,903
Additions	-	-
Assets of disposal held for sale	-	-
At 31 December 2022	92,903	92,903
Depreciation
At 1 January 2022	90,726	90,726
Charge for year	2,176	2,176
Disposals	-	-
At 31 December 2022	92,902	92,902
Carrying amount
At 31 December 2022	1	1
At 31 December 2021	2,177	2,177

 

16. Intangible assets

Group

31 December 2023	SCS Production assets US $	Total US $
At 1 January 2023	-	-
Additions	-	-
At 31 December 2023	-	-
Depletion and impairment
At 1 January 2023	-	-
Depletion	-	-
Impairment	-	-
At 31 December 2023	-	-
Carrying amount
At 31 December 2023	-	-
At 31 December 2022	-	-

 

31 December 2022	SCS Production assets US $	Total US $
At 1 January 2022	10,875,022	10,875,022
Additions	61,233	61,233
Assets of disposal held for sale	(10,429,437)	(10,429,437)
At 31 December 2022	506,818	506,818
Depletion and impairment
At 1 January 2022	3,743,115	3,743,115
Depletion	1,419,193	1,419,193
Impairment	506,818	506,818
Assets of disposal held for sale	(5,162,308)	(5,162,308)
At 31 December 2022	506,818	506,818
Carrying amount
At 31 December 2022	-	-
At 31 December 2021	7,131,907	7,131,907

 

All intangible assets relate to oil & gas activities. The Group's oil & gas assets were assessed for impairment at 31 December 2022. The intangibles are held within one CGU, the SCS licence concession.

In 2022, the SCS operations were reclassified as Discontinued operations held for sale. No further general impairment was considered necessary as the proceeds of the sale exceed the net liabilities of the discontinued operations. However, in exception, the value of UK costs capitalised up to the time of the decision to sell of $506,818 was assessed as irrecoverable and has been fully impaired in 2022.

Company

31 December 2023	Argentina production assets US $	Total US $
At 1 January 2023	-	-
Additions	-	-
At 31 December 2023	-	-
Depletion and impairment
At 1 January 2023	-	-
Depletion	-	-
Impairment	-	-
At 31 December 2023	-	-
Carrying amount
At 31 December 2023	-	-
At 31 December 2022	-	-

 

 

31 December 2022	Argentina production assets US $	Total US $
At 1 January 2022	445,585	445,585
Additions	61,233	61,233
At 31 December 2022	506,818	506,818
Depletion and impairment
At 1 January 2022	-	-
Depletion	-	-
Impairment	506,818	506,818
At 31 December 2022	506,818	506,818
Carrying amount
At 31 December 2022	-	-
At 31 December 2021	445,585	445,585

 

17. Right of use assets

Group and Company

 

31 December 2023	Office lease US $	Total US $
At 1 January 2023	-	-
Additions	69,930	69,930
At 31 December 2023	69,930	69,930
Depreciation
At 1 January 2023	-	-
Charge for the year	27,972	27,972
Impairment	-	-
At 31 December 2023	27,972	27,972
Carrying amount
At 31 December 2023	41,958	41,958
At 31 December 2022	-	-

 

31 December 2022	Office lease US $	Total US $
At 1 January 2022	-	-
Additions	-	-
At 31 December 2022	-	-
Depreciation
At 1 January 2022	-	-
Charge for the year	-	-
Impairment	-	-
At 31 December 2022	-	-
Carrying amount
At 31 December 2022	-	-
At 31 December 2021	-	-

 

The office lease was agreed during 2021 but it is not considered to be material to restate 2022 and 2021 for the right of use asset and lease liability.

Depreciation of $27,972 (2022: $Nil) and interest on lease liabilities of $6,993 (2022: $Nil) are recognised in the statement of comprehensive income.

18. Interest in subsidiary undertakings
		Year to 31 December 2023 US $	Year to 31 December 2022 US $
Cost or valuation
At 1 January		30,521,648	30,521,648
Additions		-	-
At 31 December		30,521,648	30,521,648
Impairment
At 1 January		28,959,327	14,516,604
Impairment		1,562,321	14,442,723
At 31 December		30,521,648	28,959,327
Carrying amount
At 31 December		-	1,562,321

 

Details of the subsidiaries are as follows:

Subsidiary	Class of share	% owned	Country of registration	Nature of business
Echo Energy Holdings (UK) Limited	Ordinary	100%	England & Wales	Holding company
Echo Energy Argentina Holdings Limited	Ordinary	100%	England & Wales	Holding company
Echo Energy Tapi Aike Limited	Ordinary	100%	England & Wales	Holding company
Eco Energy TA Op Limited	Ordinary	100%	England & Wales	Holder of Argentinian branch assets
Echo Energy C D & LLC Limited	Ordinary	100%	England & Wales	Holding company
Eco Energy CDL Op Limited	Ordinary	100%	England & Wales	Holder of Argentinian branch assets
Echo Energy Bolivia (Hold Co 1) Limited	Ordinary	100%	England & Wales	Holding company
Echo Energy Bolivia (Op Co 1) Limited	Ordinary	100%	England & Wales	Holder of Bolivian branch assets
Echo Energy Bolivia (Hold Co 2) Limited	Ordinary	100%	England & Wales	Holding company
Echo Energy Bolivia (Op Co 2) Limited	Ordinary	100%	England & Wales	Dormant

 

The registered address for all of the above subsidiaries is: 85 Great Portland Street, London, W1W 7LT

 

19. Current investments

Financial assets at fair value through profit and loss:	Year to 31 December 2023 US $	Year to 31 December 2022 US $
Equity securities	283,422	-
Total	283,422	-

 

During the year, the Company received £400,000 worth of shares in Interoil Exploration and Production ASA (a company listed on the Oslo stock exchange in Norway) as part of the agreements entered into by the Group to dispose of its SCS operations. The fair values of quoted equity securities are determined through Level 1 inputs from quoted market prices.

The Group also retained a 5% non-operated working interest in the SCS assets and was due to receive $174,459, however this is not considered to be recoverable and has been fully impaired as at 31 December 2023.

20. Trade and other receivables
	Group			Company
Current	31 December 2023 US $		31 December 2022 US $	31 December 2023 US $	31 December 2022 US $
Trade receivables	-		531,815	-	-
Prepayments	72,589		176,493	72,589	176,493
Other receivables	21,870		61,243	21,870	57,685
	94,459		769,550	94,459	234,178
Non-current
Amounts owing by subsidiaries	-		-	11,358,845	11,358,845
Impairment in year	-		-	(11,358,845)	(11,358,845)
	-		-	-	-

The group's exposure to credit and market risks, including maturity analysis, relating to trade and other receivables is disclosed in note 22 "Financial risk review". The directors consider that the carrying amount of trade and other receivables approximated to their fair value.

21. Cash and cash equivalents
	Group			Company
	31 December 2023 US $		31 December 2022 US $	31 December 2023 US $	31 December 2022 US $
Cash at bank	83,127		1,132,616	82,357	146,928
	83,127		1,132,616	82,357	146,928

 

 

22. Financial Instruments and treasury risk management

Fair value of financial assets and liabilities

The carrying values of financial assets and liabilities are considered to be materially equivalent to their fair values, with the expectation of the Eurobond loan which is calculated at present value as disclosed in note 25. The fair value is approximately $6.7m higher due to the impact of using a market rate interest.

Treasury risk management

The Group manages a variety of market risks, including the effects of changes in foreign exchange rates, liquidity and counterparty risk.

Credit risk

The Groups' principle financial assets are bank balances and cash and other receivables. The credit risk on liquid funds is limited because the counterparties are UK, Argentine and Bolivian banks with high credit ratings. The Group operates with positive cash and cash equivalents as a result of using share capital in anticipate of future funding requirements. The Group's policy is therefore one of achieving higher returns with minimal risks. In order to provide a degree of certainty, the Group looks, when appropriate, to invest in short-term fixed-interest treasury deposits giving a low risk profile to these assets.

Currency risk

The Group's operations are now primarily located in the United Kingdom, with the main exchange risk being between the US Dollar and Pound Sterling for general operations and US Dollar and Euro for borrowings. Previously the Group was exposed to currency risk from its operations in Argentina, but these have now been discontinued.

At year end the Group held the following cash and cash equivalent balances:

	Year to 31 December 2023 US $	Year to 31 December 2022 US $
US Dollars	565	46
GBP Sterling	82,570	146,903
Euro	(8)	(19)
Argentine Peso	-	985,436
Bolivian Boliviano	-	250
Total	83,127	1,132,616

 

The consolidated statement of comprehensive income would be affected by US $8,257 (2022: US $14,690) if the exchange rate between the US $ and GBP changed by 10%. There would be a loss of US $Nil (2022: US $98,543) if the exchange rate between the Argentine Peso and the US Dollar weaken by 10%.

The Group has exposure to the Euro, Echo hold €5.5million (2022: €3.9million) bond notes, the Group held Euro-denominated funds at the beginning of the period to cover servicing of debt during the accounting year. The primary source of funds for the Group in the period was equity raised in GBP, these funds are predominately translated into USD to fund exploration, acquisition and production activity in Argentina. No hedging products were used during this accounting period, but management actively reviewed currency requirements to access the suitability of hedging products. The Groups consolidated statement of income would be affected by approximately US $605,385 (2022: US $417,009) by a reasonably possible 10 percentage points fluctuation in the exchange rate between US Dollars and Euros.

Currency risk (continued)

The Group used Blue-Chip Swaps during the year to repatriate funds from Argentina to the UK. A Blue-Chip Swap is when a domestic investor purchases a foreign asset and then transfers the purchased asset to an offshore entity. The Group's Argentine subsidiary purchased shares in highly stable and liquid companies that are traded on both domestic and offshore stock exchanges. These shares were held for a fixed period in accordance with Argentinian regulation. Following the end of the fixed period the shares were sold offshore and the resulting funds were then repatriated to the parent company. This type of transactions is therefore exposed to stock price volatility during the hold period and incurs transaction fees.

 

At year end the Group held the following cash and cash equivalent balances:

	Year to 31 December 2023 US $	Year to 31 December 2022 US $
US Dollars	565	46
GBP Sterling	82,570	146,903
Euro	(8)	(19)
Argentine Peso	-	985,436
Bolivian Boliviano	-	250
Total	83,127	1,132,616

 

The consolidated statement of comprehensive income would be affected by US $8,257 (2022: US $14,690) if the exchange rate between the US $ and GBP changed by 10%. There would be a loss of US $Nil (2022: US $98,543) if the exchange rate between the Argentine Peso and the US Dollar weaken by 10%.

The Group has exposure to the Euro, Echo hold €5.5million (2022: €3.9million) bond notes, the Group held Euro-denominated funds at the beginning of the period to cover servicing of debt during the accounting year. The primary source of funds for the Group in the period was equity raised in GBP, these funds are predominately translated into USD to fund exploration, acquisition and production activity in Argentina. No hedging products were used during this accounting period, but management actively reviewed currency requirements to access the suitability of hedging products. The Groups consolidated statement of income would be affected by approximately US $605,385 (2022: US $417,009) by a reasonably possible 10 percentage points fluctuation in the exchange rate between US Dollars and Euros.

The Group used Blue-Chip Swaps during the year to repatriate funds from Argentina to the UK. A Blue-Chip Swap is when a domestic investor purchases a foreign asset and then transfers the purchased asset to an offshore entity. The Group's Argentine subsidiary purchased shares in highly stable and liquid companies that are traded on both domestic and offshore stock exchanged. These shares were held for a fixed period in accordance with Argentinian regulation. Following the end of the fixed period the shares were sold offshore and the resulting funds were then repatriated to the parent company. This type of transactions is therefore exposed to stock price volatility during the hold period and incurs transaction fees.

Interest rate risk

The Group holds debt instruments there were issued at a fixed rate. As party of the Group's policy to maximise returns on cash held, cash held is placed in interest-bearing accounts where possible. During the course of 2023, Echo invested cash into operations and did not hold significant cash balances for prolonged periods of time. The consolidated statement of comprehensive income would be affected by US $Nil (2022: US $6) by a one percentage point change floating interest rate on a full-year basis.

Liquidity risk

The Group actively manages its working capital to ensure the Group has sufficient funds for operations and planned activated. Operation cash flow represents receipts from revenue, together with on-going direct operational support costs, exploration, appraisal, administration and business development costs. The Group manages its liquidity requirements by the use of both short-term and long-term cash flow forecasts. The Group's policy is to ensure facilities are available as required, to issue equity share capital and from strategic alliances in accordance with long-term cash flow forecasts. The Group has no undrawn committed facilities as at 31 December 2023.

The Group's financial liabilities are primarily obligations under joint operations, trade payables and operational costs. All amounts are due for payment in accordance with agreed settlement terms with suppliers or statutory deadlines and all within one year.

The Group hold Euro-denominated long-term debt, see note 25. Other than long-term debts, all financial liabilities are due for settlement within 12 months. The Group held cash balances of US $83,127 (2022: US $1,132,616).

The Group does not currently use derivatives financial instruments to hedge currency and commodity price risk as it not considered necessary. Should the Group identify a requirement for the future use of such financial instruments, a comprehensive set of policies and systems as approved by the directors will be implemented.

Commodity Price Risk

The Group is no longer exposed to significant risks of fluctuations on prevailing commodity market prices due to the disposal of its Argentina operations.

Capital management

The Group's legacy strategy has led to its capital structure being a mixture of debt and equity. The directors will reassess the future capital structure when new projects are sufficiently advances and restructure accordingly.

The Group's financial strategy is to utilise its resources to further appraise and test the Group's projects, forming strategic alliances for specific projects where appropriate together with assessing target acquisitions. The Group keeps investors and the market informed of progress with its projects through regular announcements and raises additional equity finance at appropriate times.

Categories of financial instruments

All of the Group's financial assets are carried at amortised cost apart from the listed equities held at fair value, as disclosed in note 19. The Group's financial liabilities are classified as financial liabilities at amortised cost.

23. Trade and other payables
	Group		Company
Current	31 December 2023 US $	31 December 2022 US $	31 December 2023 US $	31 December 2022 US $
Trade payables	488,777	657,923	488,777	556,536
Social security and other taxes	26,737	388,422	26,737	105,121
Accruals	283,239	163,401	283,239	162,468
Other payables	-	120,245	-	120,244
	798,753	1,329,991	798,753	944,369
Lease liabilities	44,078	-	44,078	-
Non-current
Amounts owing to subsidiaries	-	-	264,378	-

 

The lease liabilities relate to the right of use asset in note 17, there were lease payments of £32,845 during the year (2022: $Nil).

24. Share capital

Issued, Called Up and Fully Paid

6,285,526,975 0.31¢ (2022 5,527,427,674 0.31¢) ordinary shares.

	Group		Company
	31 December 2023 US $	31 December 2022 US $	31 December 2023 US $	31 December 2022 US $
1 January	19,795,863	7,209,086	19,795,863	7,209,086
Equity shares issued	951	12,586,777	951	12,586,777
	19,796,814	19,795,863	19,796,814	19,795,863

 

The holders of the 0.31¢ (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.

Shares were issued during the year as follows:

	Date	Shares	Price pence	Price (US ¢)	Nominal Value (US $)
1 January 2023		5,527,427,674			19,795,863
Exercise of warrants	02/01/2023	33,190,876	0.265	0.338	42
Shares issued	28/06/2023	115,384,615	0.065	0.083	147
Shares issued	29/09/2023	285,714,286	0.028	0.036	348
Shares issued	29/12/2023	323,809,524	0.011	0.013	414
31 December 2023		6,285,526,975			19,796,814

 

Pursuant to the exercise of share warrants, on 22 December 2022 the company received cash of £87,977 (US$97,523), but the 33,190,876 ordinary shares were not issued until 2 January 2023. These were shown within shareholders' funds as 'cash received on shares to be issued' in the previous year.

The 115,384,615 shares issued on 28 June 2023 were issued to Interoil Exploration and Production ASA as part of the agreements entered into by the Group to dispose of its SCS operations.

The other shares were issued to raise funds or settle liabilities owed to suppliers.

(A)  Share options

 

The Group has a share option scheme established to reward and incentivise the executive management team and staff for delivering share price growth. The share option scheme is administered by the remuneration committee. The expected life of the options is based on the expected time through to exercise and is not necessarily indicative of the exercise patterns.

Share options are valued using the stochastic Black-Scholes model. The inputs to the model are the market price at the date of grant, the exercise price set out in the option agreement, expected life, the risk-free rate of return and the expected volatility. A 10-year gift rate is used as an equivalent to risk-free rate and the expected volatility was determined with reference to the Company's share price.

The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The cost of options is amortised to the statement of comprehensive income over the service period of the option.

On 21 December 2023 the Company issued 238,468,698 options to Stephen Birrell over new Ordinary shares in the Company. The options have an exercise price of 0.0105 pence per new Ordinary share, being the price equal to the closing price per Ordinary share on 21 December 2023, and will vest on the third anniversary of the date of grant and will be exercisable anytime thereafter until expiry on the fifth anniversary of the date on which the Options were granted.

Details of the tranches of share options outstanding at the year-end are as follows:

Share options	Number 31/12/202	WAEP* (¢) 31/12/2023	Number 31/12/2022	WAEP* (¢) 31/12/2022
Outstanding at 1 January	71,266,483	3	120,254,120	3
Granted during the year	238,468,698	0.013	-	-
Forfeited during the period	(23,070,755)	3	(8,987,636)	2
Cancelled during the year	(1,195,728)	3	(40,000,001)	3
Options outstanding as at 31 December	285,468,698	0.3	71,266,483	3
Exercisable at 31 December	39,000,000	2.3	33,266,483	4

*Weighted Average Exercise Price (WAEP)

The fair values on the grant date and each reporting date were determined using the Black-Scholes option pricing model. The following key assumptions were used in determining the derivative's fair value at the reporting date:

Options	22/12/2023
Market stock price	0.0105p
Option strike price	0.0105p
Volatility	70%
Expiration of the option	5 years
Risk free rate	3.3%
Future value	$31,877
Expense	$2,363

 

The weighted average outstanding life of vested share options is 1 year. The price for outstanding options ranges between 0.013¢ and 3¢ (0.0105p and 2.6p). The outstanding options are not subject to any share performance-related vesting conditions, but vesting is conditional upon continuity of service.

The Group recognised total expenses of US $31,735 (2022: US $157,757) related to equity-settled, share based payment transactions during the year.

A deferred taxation asset has not been recognised in relation to the charge for share-based payments due to availability of tax losses to be carried forward.

(B)  Warrants over ordinary shares

 

The Company issued warrants over ordinary shares to subscribers of new ordinary shares and as fundraising commission in respect of debt restructuring completed during the year to 31 December 2023.

Details of the tranches of warrants outstanding at the year-end are as follows:

 

Warrants	Number 31/12/2023	WAEP* (¢) 31/12/2023	Number 31/12/2022	WAEP* (¢) 31/12/2022
Outstanding at 1 January	565,016,300	1	551,716,990	9
Granted during the year	-	-	402,418,260	1
Exercised during the period	(33,190,876)	1	-	-
Lapsed in year	(162,598,040)	1	(389,118,950)	8
Outstanding as at 31 December	369,227,384	0.5	565,016,300	1

*Weighted Average Exercise Price (WAEP)

Warrants values are calculated using the Black-Scholes option pricing model using the following inputs:

The exercise price for outstanding warrants as at 31 December 2023 ranges between 0.32¢ and 0.83¢ (0.25p and 0.65p). The residual weighted average contractual life for warrants is less than 1 year.

 

(C)  Share premium account

	31 December 2023			31 December 2022
Share options		Group US $	Company US $		Group US $	Company US $
1 January		83,790,504	83,790,504		64,977,243	64,977,243
Premium arising on issue of equity shares		332,943	332,943		7,521,415	7,521,415
Warrants lapsed		-	-		-	-
Warrants issued		-	-		11,291,846	11,291,846
Transaction costs		-	-		-	-
31 December		84,123,447	84,123,447		83,790,504	83,790,504

 

Warrants and options which lapsed, expired or were exercised in the period have been transferred between the warrant or option reserve and retained earnings.

25. Loans due in over one year
		31 December 2023 US $	31 December 2022 US $
Five-year secured bonds		6,053,854	4,170,086
Other loans		1,227,292	1,293,215
Total		7,281,146	5,463,301

 

	31 December 2022 US $	Funds raised US $	Amortised finance charges US $	Exchange adjustments US $	31 December 2023 US $
€20 million five-year secured bonds	4,170,086	-	1,227,296	656,472	6,053,854
Other loans	1,293,215	82,750	(311,004)	162,331	1,227,292
Total	5,463,301	82,750	916,292	818,803	7,281,146

 

 

Euro-bond renegotiation

On 2 December 2022, a partial (50%) settlement of the principle and accrued interest was agreed on the existing Euro-secured denominated bonds, $11.3m of the debt being settled by the issue of 2,436,938 ordinary shares. On the basis the settlement of the loan was on favourable terms to the group management considered the counterparty was acting in their capacity as shareholders of the Group and therefore the criteria in IFRIC 19 - Extinguishment of financial liabilities with Equity Instruments did not apply. Therefore the value of the shares issued has been deemed to be the same as the carrying value of the loan.

In addition and at the same time, the repayment date for the remaining bonds was moved back from 2024 until 2032 and the interest rate reduced from 8% to 2%. This is a substantial modification to the loan terms, management calculated the present value of the new loan and compared to the carrying value. The difference has been recorded as a capital contribution to the group of $7.2m.

The Euro bondholders are also considered to be Related Parties by virtue of them being shareholders.

 

Maturity analysis

Contractual undiscounted cashflows:

	31 December 2023 US $	31 December 2022 US $
Amounts due within one year	-	-
Amounts due between one and five years	82,750	1,293,215
Amounts due over five years	7,198,396	4,170,086
Total	7,281,146	5,463,301

 

26. Related party transactions

Inter-Group balances

In order for individual subsidiary companies to carry out the objectives of the group, amounts are loaned to them on an unsecured basis. At the year-end the following amounts were outstanding:

 

 

Amounts owed to Echo Energy plc from:	31 December 2023 US $	31 December 2022 US $
Echo Energy Bolivia Op Co 1 Limited	-	562,130
Eco Energy CDL Op Limited	-	1,156,518
Eco Energy TA Op Limited	-	9,640,324
	-	11,358,972

 

The loans are fully impaired and are not considered to be recoverable, so have been written down to $Nil.

At the year end the Company owed $68,222 to Ossian Energy Ltd, a company controlled by the director Stephen Birrell, for professional fees invoiced prior to his appointment as a director.

The Directors' emoluments, shareholding and options are disclosed in the Directors' Remuneration Report and the Directors' Report. As at the year end the Company owed the directors $233,770 in respect of accrued and deferred salaries.

27. Controlling party

The directors do not consider there to be a controlling party.

28. Commitments

Echo had no committed expenditure at the end of 31 December 2023.

29. Post balance sheet events

Shares were issued post 31 December 2023 as follows:

	Date	Shares	Prices (US $)
Shares issued	26/01/2024	1,111,111,111	63,565
Shares issued	29/01/2024	333,333,333	19,048
Shares issued	29/01/2024	5,555,555,556	317,475
Shares issued	07/02/2024	3,742,222,222	212,538
Shares issued	04/04/2024	1,658,974,359	81,884

Warrants were issued post 31 December 2023 as follows:

Date	Warrants	Strike price	Term	Expiry date
29/01/2024	363,555,556	0.0080	5 years	29/01/2029
08/02/2024	224,533,333	0.0080	5 years	07/02/2029

 

Other post balance sheet events occurred as follows:

07/02/2024	Cancellation of USD$631,050 (GBP £500,000) unsecured convertible loan note funding facility
09/05/2024	Decision made to broaden the Company's acquisition strategy towards a wider range of natural resources projects
06/06/2024	Company entered into a USD$639,450 (GBP £500,000) unsecured conditional convertible loan note, details of which are in the RNS dated 6 June 2024
26/06/2026	Mr James Parsons resigned from the Board