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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Echo Energy Plc | LSE:ECHO | London | Ordinary Share | GB00BF0YPG76 | ORD 0.0001P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.0001 | -2.33% | 0.0042 | 0.004 | 0.0044 | 0.0043 | 0.0042 | 0.0043 | 80,702,763 | 09:52:36 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Drilling Oil And Gas Wells | 14.11M | -9.59M | -0.0017 | 0.00 | 0 |
From Apr 2019 to Apr 2024
TIDMECHO
RNS Number : 4772A
Echo Energy PLC
12 September 2018
12 September 2018
Echo Energy plc
("Echo" or the "Company")
Interim Results
Echo Energy plc, the Latin American focused upstream oil and gas company, is pleased to announce its unaudited interim results for the six months ended 30 June 2018.
Highlights
-- Completion of Argentinian farm-in and re-admission to AIM in January 2018
-- 3 well workover campaign at Fraccion D completed ahead of time and under budget during the period
-- 4 well back-to-back exploration campaign across the licences on independent structures commenced in May 2018
-- Gas discovery and extended well test on the CSo-85 well on the Eastern flank of the Cañadon Salto Field at Fraccion D
-- H1 2018 oil sales of US$2.1 million and gas sales of US$2.1 million -- Cash balances of GBP26.1 million as at 30 June 2018
For further information please contact:
Echo Energy plc Fiona MacAulay, CEO f.macaulay@echoenergyplc.com Smith & Williamson (Nominated Adviser) David Jones Ben Jeynes Katy Birkin +44 (0)20 7131 4000 Hannam & Partners (Joint Corporate Broker) Giles Fitzpatrick Andrew Chubb Ernest Bell +44 (0)20 7907 8500 Shore Capital (Joint Corporate Broker) Jerry Keen +44 (0)20 7408 4090 Vigo Communications (PR Adviser) Patrick d'Ancona Chris McMahon Kate Rogucheva +44 (0)20 7390 0230
Chief Executive Officer's Statement
"Our bold growth strategy in Latin America has provided us with access to a balanced portfolio in the region where we are focused on multiple exploration opportunities, including the high impact Tapi Aike licence, and have the potential to add production, cash flow and additional reserves to the portfolio."
The first six months of this year have been incredibly busy for your company, and post period this level of activity has continued. In January the Company was readmitted to trading on AIM following completion of the farm-in agreement with Compañía General de Combustibles S.A. ("CGC") which saw the company take a 50% interest in a number of assets in Argentina. Our work on these licences, both technical and operational, has formed the bulk of our activity year to date.
Starting in April this year the company executed a three well workover campaign on its Fracción D licence. This activity was completed ahead of time, under budget and with adherence to the highest standards of health and safety. The highlight of the campaign was the gas discovery and subsequent extended well test on the CSo-85 well on the eastern flank of the Cañadon Salto Field for which we are currently developing plans for a commercial gas project.
The workover activity will also result in an increase in oil production across the fields and will contribute to our oil sales in Argentina, with ongoing oil sales delivering a combined US$2.1 million to the Company in H1 2018 alongside gas sales of US$2.1 million.
A subsequent exploration campaign comprising the drilling of four back to back exploration wells on independent structures began in May 2018, producing positive results from the Tobifera formation across the licences, but the company notes caution should be applied prior to testing of the well due to the complex nature and petrophysics of the volcaniclastic reservoir. The company is still in the process of evaluating the considerable volume of data generated for assimilation into the regional model.
Post period the ELM-1004 well which displayed positive readings during the drilling phase yielded dry gas to surface on initial testing and a well stimulation programme to improve the rate is now being developed, while the testing of the EMS-1001 well is due to commence later this year.
In May, we announced the completion of an GBP8.5 million placing to fund an extended seismic campaign on the Tapi Aike licence. We moved rapidly to secure this additional funding as a window of opportunity had opened in which we were able to secure pricing for a total of 2,000 km(2) of 3D seismic acquisition across both the Tapi Aike and Fracción C, Fracción D and Laguna De Los Capones ("CDL") licences, with a c.US$7 million saving to the previously estimated total for Tapi Aike alone. This saving is broadly in line with the gross cost of an exploration well on Tapi Aike and the early commencement of seismic acquisition will accelerate the likely spud date for a well on this extremely exciting frontier scale acreage.
Looking ahead, I expect the level of activity seen in the first half of the year to continue throughout 2018. The test rig is currently in the CDL licence area completing the testing programme for the wells drilled during the exploration campaign and is also engaged in a pilot project of workovers in the Cañadon Salto Field to reinstate or increase production in four selected wells.
We are currently preparing for the 3D seismic shoot on Tapi Aike which we expect to commence this year. The seismic acquisition programme should take approximately 4-5 months, with processed results expected in H2 2019.
Once this new data has been integrated into our current dataset, and the identification and hi-grading of prospects has taken place, we would be anticipating to be drill ready at Tapi Aike by late 2019.
I look forward to updating you on our progress throughout the remainder of 2018 and would like to thank all of our shareholders for their continued support.
FIONA MACAULAY
CHIEF EXECUTIVE OFFICER
condensed statement of Comprehensive income
SIX MONTHSED 30 JUNE 2018
Hot Features
Premium
Unaudited Unaudited Audited
1 January 1 January 1 January
2018 to 2017 to 2017 to
30 June 30 June 31 December
2018 2017 2017
Notes GBP GBP GBP
------------------------------------------------- ----- ----------- ----------- ------------
Continuing operations
Revenues 2,885,949 - -
Cost of sales (2,700,470) - -
------------------------------------------------- ----- ----------- ----------- ------------
Gross profit 185,479 - -
Exploration expenses (431,642) - (432,486)
Administrative expenses (2,513,377) (1,287,580) (5,322,458)
Gain on disposal of foreign subsidiary 394,253 - -
------------------------------------------------- ----- ----------- ----------- ------------
Operating loss (2,365,287) (1,287,580) (5,754,944)
Financial income 14,536 369 2,596
Financial expense 3 (2,000,109) (364,288) (1,687,199)
------------------------------------------------- ----- ----------- ----------- ------------
Loss before tax (4,350,860) (1,651,499) (7,439,547)
Taxation 4 - - -
------------------------------------------------- ----- ----------- ----------- ------------
Loss from continuing operations (4,350,860) (1,651,499) (7,439,547)
Discontinued operations
Gain/(loss) after taxation for the period
from discontinued operations - (24,759) 25,991
------------------------------------------------- ----- ----------- ----------- ------------
Loss for the year (4,350,860) (1,676,258) (7,413,556)
Other comprehensive income:
Other comprehensive income to be reclassified
to profit
or loss in subsequent periods (net of tax)
Exchange difference on translating foreign
operations 83,450 2,121 (91,653)
------------------------------------------------- ----- ----------- ----------- ------------
Total comprehensive loss for the PERIOD (4,267,410) (1,674,137) (7,505,209)
------------------------------------------------- ----- ----------- ----------- ------------
Loss attributable to:
Owners of the parent (4,350,860) (1,676,258) (7,413,556)
------------------------------------------------- ----- ----------- ----------- ------------
Total comprehensive loss attributable to:
Owners of the parent (4,267,410) (1,674,137) (7,505,209)
------------------------------------------------- ----- ----------- ----------- ------------
Loss per share (pence) 5
Basic (1.0) (0.9) (2.7)
------------------------------------------------- ----- ----------- ----------- ------------
Diluted (1.0) (0.9) (2.7)
------------------------------------------------- ----- ----------- ----------- ------------
Loss per share (pence) for continuing operations
Basic (1.0) (0.9) (2.7)
------------------------------------------------- ----- ----------- ----------- ------------
Diluted (1.0) (0.9) (2.7) ------------------------------------------------- ----- ----------- ----------- ------------
condensed statement of Financial position
AS AT 30 JUNE 2018
Unaudited Unaudited Audited
1 January 1 January 1 January
2018 to 2017 to 2017 to
30 June 30 June 31 December
2018 2017 2017
Notes GBP GBP GBP
----------------------------------------- ----- ------------ ------------ ------------
Non-current assets
Property, plant and equipment 6 266,259 1,957 285,145
PPE - O&G Properties - 432,486 -
Other Intangible assets 7 7,368,086 - 1,885,984
----------------------------------------- ----- ------------ ------------ ------------
7,634,345 434,443 2,171,129
Current assets
Inventories 739,976 - -
Other receivables 2,579,660 118,239 1,055,336
Cash and cash equivalents 8 26,133,284 25,545,780 19,719,072
----------------------------------------- ----- ------------ ------------ ------------
29,452,920 25,664,019 20,774,408
Assets held for distribution - 91,808 54,777
----------------------------------------- ----- ------------ ------------ ------------
29,452,920 25,755,827 20,829,185
Current liabilities
Trade and other payables (6,501,319) (479,890) (2,500,372)
Liabilities directly associated with the
assets held for distribution - (11,864) (28,391)
----------------------------------------- ----- ------------ ------------ ------------
(6,501,319) (491,754) (2,528,763)
Net current assets 22,951,601 25,264,073 18,300,422
----------------------------------------- ----- ------------ ------------ ------------
Non-current liabilities
Loans due in over one year 12 (11,640,162) (10,245,639) (11,412,361)
Right of use liability (101,290) - (166,624)
----------------------------------------- ----- ------------ ------------ ------------
(11,741,452) (10,245,639) (11,578,985)
Total liabilities (18,242,771) (10,737,393) (14,107,748)
----------------------------------------- ----- ------------ ------------ ------------
Net assets 18,844,494 15,452,877 8,892,566
----------------------------------------- ----- ------------ ------------ ------------
Equity attributable to equity holders of
the parent
Share capital 9 3,388,585 3,104,919 3,112,586
Share premium 10 38,358,043 25,439,364 24,636,445
Shares to be issued - 277,468 -
Share warrant reserve 8,557,571 103,058 8,574,827
Share option reserve 1,278,902 8,730,575 669,456
Foreign currency translation reserve 69,224 473,801 380,027
Retained earnings (32,807,831) (22,676,308) (28,480,775)
----------------------------------------- ----- ------------ ------------ ------------
Total equity 18,844,494 15,452,877 8,892,566
----------------------------------------- ----- ------------ ------------ ------------
condensed statement of Changes in equity
SIX MONTHSED 30 JUNE 2018
Foreign
Shares Share currency
Retained Share Share to be Warrant option translation Total
earnings capital premium issued reserve reserve reserve equity
GBP GBP GBP GBP GBP GBP GBP GBP
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
Six months
to
30 June 2018
1 January 2018 (28,480,775) 3,112,586 24,636,445 - 8,574,827 669,456 380,027 8,892,566
Loss for the
year (4,350,860) - - - - - - (4,350,860)
Exchange
differences - - - - - - 83,450 83,450
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
Total
comprehensive
loss for the
year (4,350,860) - - - - - 83,450 (4,267,410)
Unwind
discontinued
operations
reserve - - - - - - (394,253) (394,253)
New shares
issued - 268,943 14,646,932 - - - - 14,915,875
Warrants
exercised 10,062 2,681 99,262 (17,256) - - 94,749
Share Options
exercised - 4,375 24,063 - - - - 28,438
Share issue
costs - - (1,048,659) - - - - (1,048,659)
Share options
lapsed 13,742 - - - - (13,742) - -
Share-based
payments - - - - - 623,188 - 623,188
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
30 June 2018 (32,807,831) 3,388,585 38,358,043 - 8,557,571 1,278,902 69,224 18,884,494
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
Six months
to
30 June 2017
1 January 2017 (21,088,479) 2,430,612 17,621,763 277,468 714,977 85,515 471,680 513,536
Loss for the
year (1,676,258) - - - - - - (1,676,258)
Exchange
differences - - - - - - 2,121 2,121
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
Total
comprehensive
loss for the
year (1,676,258) - - - - - 2,121 (1,674,137)
New shares
issued - 674,307 7,506,397 - - - - 8,180,704
New share
warrants
issued - - - - 8,448,812 - - 8,448,812
Warrants
exercised - - 412,524 - (412,524) - - -
Warrants
lapsed 20,690 - - - (20,690) - - -
Share issue
costs - - (101,320) - - - - (101,320)
Share options
lapsed 67,739 - - - - (67,739) - -
Share-based
payments - - - - - 85,282 - 85,282
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
30 June 2017 (22,676,308) 3,104,919 25,439,364 277,468 8,730,575 103,058 473,801 15,452,877
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
Year to 31
December 2017
1 January 2017 (21,088,479) 2,430,612 17,621,763 277,468 714,977 85,515 471,680 513,536
Loss for the
year (7,413,556) - - - - - - (7,413,556)
Exchange
differences - - - - - - (91,653) (91,653)
-------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
Total
comprehensive
loss for the
year (7,413,556) - - - - - (91,653) (7,505,209)
New shares
issued - 681,974 8,116,002 - - - - 8,797,976
New share
warrants
issued - - - - 7,859,850 - - 7,859,850 Share issue costs - - (1,101,320) - - - - (1,101,320) Share options lapsed 47,565 - - - - (47,565) - - Share-based payments (26,305) - - (277,468) - 631,506 - 327,733 -------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- ----------- 31 December 2017 (28,480,775) 3,112,586 24,636,445 - 8,574,827 669,456 380,027 8,892,566 -------------- ------------ ---------- ----------- ----------- ----------- ----------- ----------- -----------
The Foreign Currency Translation Reserve relating to the discontinued Italian operations has been unwound in the current period GBP394,253.
Condensed Consolidated Cash Flow Statement
SIX MONTHSED 30 JUNE 2018
Unaudited Unaudited Audited
1 January 1 January 1 January
2018 to 2017 to 2017 to
30 June 30 June 31 December
2018 2017 2017
GBP GBP GBP
----------------------------------------------------- ----------- ----------- ------------
Cash flows from operating activities
Loss from continuing operations (4,350,860) (1,651,499) (7,439,547)
Loss from discontinued operations - (24,759) 25,991
----------------------------------------------------- ----------- ----------- ------------
(4,350,860) (1,676,258) (7,413,556)
Adjustments for:
Depreciation of property, plant and equipment 34,641 1,690 34,066
Loss on disposal of property, plant and equipment (29,529) - -
Impairment of intangible assets and goodwill - - 432,486
Share-based payments 623,188 85,282 672,510
Interest income (14,536) (369) (2,596)
Interest expense 1,441,010 364,288 1,939,485
----------------------------------------------------- ----------- ----------- ------------
(2,296,086) (1,225,367) (4,337,605)
Decrease in inventories - -
(Increase)/decrease in other receivables (1,469,547) 116,978 (771,367)
(Increase)/decrease in inventory (739,976) - -
Increase/(decrease) in trade and other payables 1,540,779 (87,272) 1,859,835
----------------------------------------------------- ----------- ----------- ------------
Cash used in operations (2,964,830) (1,195,661) (3,249,137)
Net cash used in operating activities (2,964,830) (1,195,661) (3,249,137)
Cash flows from investing activities
Purchases of property, plant and equipment (13,791) - (1,885,984)
Purchase of intangible assets (3,274,438) - (45,061)
----------------------------------------------------- ----------- ----------- ------------
Net cash used in investing activities (3,288,229) - (1,931,045)
Cash flows from financing activities
Net proceeds from debt - 13,346,750 13,202,175
Interest received 14,536 369 2,596
Interest paid (1,188,330) (153,731) (540,484)
Repayments of right of use liability (149,337) - (42,771)
Issue of share capital 15,039,061 13,365,889 13,194,209
Share issue costs (1,048,659) - (1,101,320)
----------------------------------------------------- ----------- ----------- ------------
Net cash from financing activities 12,667,271 26,559,277 24,714,405
----------------------------------------------------- ----------- ----------- ------------
Net increase/(decrease) in cash and cash equivalents 6,414,212 25,363,616 19,534,223
Cash and cash equivalents at the beginning of the
period 19,719,072 182,164 184,849
----------------------------------------------------- ----------- ----------- ------------
Cash and cash equivalents at the end of the period 26,133,284 25,545,780 19,719,072
----------------------------------------------------- ----------- ----------- ------------
notes to the condensed interim consolidated financial INFORMATION
SIX MONTHSED 30 JUNE 2018
1. Accounting policies
General information
This interim financial information is for Echo Energy plc and subsidiary undertakings. The company is registered, and domiciled, in England and Wales and incorporated under the Companies Act 2006.
Basis of preparation
The condensed consolidated interim financial information for the period from 1 January 2018 to 30 June 2018 has been prepared in accordance with International Accounting Standard ("IAS") 34 Interim Financial Reporting as adopted by the European Union ("EU") and on the going concern basis. They are in accordance with the accounting policies set out in the statutory accounts for the year ended 2017 and are expected to be applied for the year ended 31 December 2018.
The comparative figures for the period 30 June 2017 and 31 December 2017 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 2017.
A copy of the company's statutory accounts for the year ended 31 December 2017 has been delivered to the Registrar of Companies; the accounts are 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.
Based on their strategic plans and working capital forecasts, the directors have a reasonable expectation that the group has adequate resources to continue in existence for the foreseeable future.
Therefore, they continue to adopt the going concern basis in the preparation of the condensed financial statements.
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 these 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 the consolidated financial statements for the year ended 31 December 2017.
Revenue Recognition
The Group was an early adopter of IFRS 15 in the accounting period ended 31 December 2017. At that time the Group had no revenue stream. The adoption of IFRS 15 has no material impact on the recognition of revenue for the Group. Revenue from the production of hydrocarbons from fields in which the Group has an interest with other producers is recognised based on the Group's working interest in a licence. Revenue is recognised based on whether physical title has passed from the Group as determined by the performance obligations under the contract.
The transaction price for gas and oil is determined in accordance with the mechanisms determined under each contract.
IFRS 9
IFRS 9 became effective on 1 January 2018 and will affect both the measurement and disclosure of financial instruments. Echo will adopt the simplified approach to the Expected Credit Loss (ECL) model as our trade receivables and contract assets do not contain a significant finance component. Adoption of the standard has no effect on the results of comparative periods.
Inventories
Inventories of petroleum crude products are valued at net realisable value, based on the pricing mechanisms of the sales contracts.
2. Business segments
Operating segments are based on internal reports about components of the Group, which are regularly reviewed and used by the Board of Directors being the Chief Operating Decision Maker ("CODM") for strategic decisions and resource allocation, in order to allocate resources to the segment and to assess its performance. The Group's reportable operating segments are as follows:
a. Parent company
b. Eastern Austral Basin
c. Tapi Aike
d. Bolivia
e. Ksar Hadada
In future periods the Tapi Aike prospect will be included as an Operating Segment, as at the Balance sheet date there was no asset specific activity to report.
The CODM monitors the operating results of each segment for the purpose of performance assessments and making decisions on resource allocation. Performance is based on assessing progress made on projects and the management of resources used. Segment assets and liabilities are presented inclusive of inter-segment balances.
Information regarding each of the operations of each reportable segment within continuing operations is included in the following table.
Eastern
Parent Austral Ksar
company Basin Tapi Aike Bolivia Hadada Consol-idation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ -------- -------- --------- -------- --------- --------------- ---------
Six months to 30 June
2018
Revenue - 2,886 - - - - 2,886
Cost of sales - (2,700) - - - - (2,700)
Exploration expense (62) (121) - (249) - - (432)
Administrative expenses (2,230) (96) (8) (179) - - (2,513)
Finance revenue 14 - - - - - 14
Finance expense (857) (844) (299) - - - (2,000)
Gain on disposal of
foreign subsidiary 394 - - - - - 394
Loss before tax (2,741) (875) (307) (428) - - (4,351)
Assets 32,004 5,579 (172) (312) (1,137) 1,125 37,087
Liabilities (12,190) (5,984) (26) (25) (18) - (18,243)
------------------------ -------- -------- --------- -------- --------- --------------- ---------
The gain on disposal of foreign subsidiaries removes the Foreign Currency Revaluation Reserve which related to the discontinued operations in Italy.
Eastern
Parent Austral Ksar
company Basin Tapi Aike Bolivia Hadada Consol-idation Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------- --------- -------- --------- -------- --------- --------------- ---------
Six months to 30 June
2017
Revenue
Cost of sales - - - - - - -
Exploration expense - - - - - - -
Administrative expense (1,271) - - - (41) 25 (1,287)
Finance revenue - - - - - - -
Finance expense (364) - - - - - (364)
Loss before tax (1,635) - - - (41) 25 (1,651)
Assets 26,847 - - - 433 (1,182) 26,098
Liabilities (10,698) - - - (1,120) 1,092 (10,726)
----------------------- --------- -------- --------- -------- --------- --------------- ---------
Year to 31 December
2017
Revenue - - - - - - -
Cost of sales - - - - - - -
Exploration expense - - - - - - -
Impairment of
intangible assets - - - - (432) - (432)
Administrative expense (3,768) (590) (590) (282) (92) - (5,322)
Finance revenue 3 - - - - - 3
Finance expense (1,687) - - - - - (1,687)
Income tax - - - - - - -
Loss before tax (5,453) (590) (590) (282) (525) - (7,440)
Assets 22,260 1,886 33 (1,233) 22,946
Liabilities (14,043) - - (120) (1,149) 1,233 (14,079)
----------------------- --------- -------- --------- -------- --------- --------------- ---------
The geographical split of non-current assets arises as follows:
United South
Kingdom America Total
GBP GBP GBP
------------------------------ ---------- ---------- ----------
30 June 2018
Property, plant and equipment 256,599 9,600 266,199
Intangible assets - 7,368,086 7,368,086
------------------------------ ---------- ---------- ----------
30 June 2017
Property, plant and equipment - 432,486 432,486
Intangible assets 1,957 - 1,957
------------------------------ ---------- ---------- ----------
31 December 2017
Property, plant and equipment 275,130 10,015 285,145
Intangible assets - 1,885,984 1,885,984
------------------------------ ---------- ---------- ----------
3. Financial expense
Six months Six months
to 30 June to 30 June 31 December
2018 2017 2017
GBP GBP GBP
-------------------------------------- ----------- ----------- -----------
Interest payable on long term loans 1,416,130 364,288 1,660,001
Other including foreign exchange 559,099 - -
Accretion of right of use liabilities 24,880 - 27,198
-------------------------------------- ----------- ----------- -----------
2,000,109 364,288 1,687,199
-------------------------------------- ----------- ----------- -----------
Interest expense includes interest at 8% coupon rate of GBP757,866, the unwinding of the discount on the issue of debt of GBP485,524 and the amortisation of loan fees of GBP172,740.
Foreign exchange movements include the revaluation of US dollar denominated intercompany balances accounted locally in Argentina, and in the UK in GBP. Other exchange movements include revaluation of euro denominated loans and US dollar bank balances.
4. Taxation
The group has tax losses available to be carried forward in certain subsidiaries and the parent.
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 2018, or in the six month period to June 2017, or the year to 31 December 2017.
5. Loss per share
The calculation of basic and diluted loss per share at 30 June 2018 was based on the loss attributable to ordinary shareholders. The weighted average number of ordinary shares outstanding during the period ended 30 June 2018 and the effect of the potentially dilutive ordinary shares to be issued are shown below.
Six months Six months
to 30 June to 30 June 31 December
2018 2017 2017
GBP GBP GBP
------------------------------------------------------- ------------ ------------ ------------
Net loss for the year (4,350,860) (1,676,258) (7,413,556)
------------------------------------------------------- ------------ ------------ ------------
Basic weighted average ordinary shares in issue during
the year 416,479,046 186,159,251 276,158,657
------------------------------------------------------- ------------ ------------ ------------
Diluted weighted average ordinary shares in issue
during the year 416,479,046 186,159,251 276,158,657
------------------------------------------------------- ------------ ------------ ------------
Loss per share (pence)
------------------------------------------------------- ------------ ------------ ------------
Basic (1.0) (0.9) (2.7)
------------------------------------------------------- ------------ ------------ ------------
Diluted (1.0) (0.9) (2.7)
------------------------------------------------------- ------------ ------------ ------------
In accordance with IAS 33 and as the average share price in the year is lower than the exercise price, the share options do not have a dilutive impact on earnings per share for the period ended 30 June 2018.
6. Property, plant and equipment
Property
Fixtures Right of
& Fittings Use Assets Total
GBP GBP GBP
--------------------------- ----------- ----------- ----------
six months to 30 June 2018
Cost
1 January 2018 70,823 268,872 339,695
Exchange differences 580 - 580
Disposals (14,016) (268,872) (282,888)
Additions 8,698 232,971 241,669
--------------------------- ----------- ----------- ----------
Six months to 30 June 2018 66,085 232,971 299,056
--------------------------- ----------- ----------- ----------
Depreciation
1 January 2018 27,663 26,887 54,550
Exchange differences 336 - 336
Charge for the period 7,601 26,887 34,488
Disposal (2,803) (53,774) (56,577)
--------------------------- ----------- ----------- ----------
Six months to 30 June 2018 32,797 - 32,797
--------------------------- ----------- ----------- ----------
Carrying amount
30 June 2018 33,288 232,971 266,259
--------------------------- ----------- ----------- ----------
Six months to 30 June 2017
Cost
1 January 2017 31,765 - 31,765
Exchange differences 209 - 209
--------------------------- ----------- ----------- ----------
30 June 2017 31,974 - 31,974
--------------------------- ----------- ----------- ----------
Depreciation
1 January 2017 28,118 - 28,118
Exchange differences 209 - 209
Charge for the period 1,690 - 1,690
--------------------------- ----------- ----------- ----------
30 June 2017 30,017 - 30,017
--------------------------- ----------- ----------- ----------
Carrying amount
30 June 2017 1,957 - 1,957
--------------------------- ----------- ----------- ----------
Property
Fixtures Right of
& Fittings Use Assets Total
GBP GBP GBP
------------------------------------ ----------- ----------- ---------
Year to 31 December 2017
Cost
1 January 2017 31,765 - 31,765
Exchange differences 1,670 - 1,670
Transfer to discontinued operations (7,673) - (7,673)
Additions 45,061 268,872 313,933
------------------------------------ ----------- ----------- ---------
31 December 2017 70,823 268,872 339,695
------------------------------------ ----------- ----------- ---------
Depreciation
1 January 2017 28,118 - 28,118
Exchange differences 39 - 39
Transfer to discontinued operations (7,673) - (7,673)
Charge for the period 7,179 26,887 34,066
------------------------------------ ----------- ----------- ---------
31 December 2016 27,663 26,887 54,550
------------------------------------ ----------- ----------- ---------
Carrying amount
------------------------------------ ----------- ----------- ---------
31 December 2017 43,160 241,985 285,145
------------------------------------ ----------- ----------- ---------
7. intangible assets
Development and exploration
Ksar Hadada
Argentina exploration
E&E acreage Total
GBP GBP GBP
--------------------------------------- ----------- ------------ -----------
Six months to 30 June 2018
Cost
1 January 2018 1,885,984 1,513,315 3,399,299
Effect of foreign exchange restatement (683,506) - (683,506)
Additions 6,165,608 - 6,165,608
--------------------------------------- ----------- ------------ -----------
30 June 2018 7,368,086 1,513,315 8,881,401
--------------------------------------- ----------- ------------ -----------
Amortisation
1 January 2018 - 1,513,315 1,513,315
Impairment charge for the period - - -
--------------------------------------- ----------- ------------ -----------
30 June 2018 - 1,513,315 1,513,315
--------------------------------------- ----------- ------------ -----------
Carrying amount
30 June 2018 7,368,086 - 7,368,086
--------------------------------------- ----------- ------------ -----------
Six months to 30 June 2017
Cost
1 January 2017 - 1,513,315 1,513,315
Additions - - -
--------------------------------------- ----------- ------------ -----------
30 June 2017 - 1,513,315 1,513,315
--------------------------------------- ----------- ------------ -----------
Amortisation
1 January 2017 - 1,080,829 1,080,829
Impairment charge for the period - - -
--------------------------------------- ----------- ------------ -----------
30 June 2017 - 1,080,829 1,080,829
--------------------------------------- ----------- ------------ -----------
Carrying amount
30 June 2017 - 432,486 432,486
--------------------------------------- ----------- ------------ -----------
Year to 31 December 2017
Cost
1 January 2017 - 1,513,315 1,513,315
Additions 1,885,984 - 1,885,984
--------------------------------------- ----------- ------------ -----------
31 December 2017 1,885,984 1,513,315 3,399,299
--------------------------------------- ----------- ------------ -----------
Amortisation
1 January 2017 - 1,080,829 1,080,829
Impairment charge for the period - 432,486 432,486
31 December 2017 - 1,513,315 1,513,315
--------------------------------------- ----------- ------------ -----------
Carrying amount
31 December 2017 1,885,984 - 1,885,984
--------------------------------------- ----------- ------------ -----------
For the purpose of impairment testing of intangible assets, recoverable amounts have been determined based upon the value in use of the group's projects. The Argentine assets have been assessed for indicators of impairment, based on the expectation of continuing operations in the Austral basin, no impairment indicators apply.
8. Cash and cash equivalents
Six months Six months
to 30 June to 30 June 31 December
2018 2017 2017
GBP GBP GBP
------------------------------------ ------------ ------------ ------------
Cash Held by Joint Venture Partners 5,459,023 - -
Bank Balances 20,674,261 25,545,780 19,719,072
------------------------------------ ------------ ------------ ------------
26,133,284 25,545,780 19,719,072
------------------------------------ ------------ ------------ ------------
9. Share capital
Six months Six months
to 30 June to 30 June 31 December
2018 2017 2017
GBP GBP GBP
------------------------------------------------- ----------- ----------- -----------
Issued, called up and fully paid
474,939,144 0.25p (June 2017: 361,473,066 0.25p)
ordinary shares
1 January 2018 3,112,586 2,430,612 2,430,612
Equity shares issued 275,999 674,307 681,974
------------------------------------------------- ----------- ----------- -----------
30 June 2018 3,388,585 3,104,919 3,112,586
------------------------------------------------- ----------- ----------- -----------
The holders of 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 issued and the subdivision of capital during the year was as follows:
Date Shares Price
------------------------------------------------ ---------- ------------ --------
1 January 2018 364,539,733
Shares issued @ .25p equity placing 3/1/2018 36,391,412 17.5p
Shares issued @ .25p, exercise of warrant 9/1/2018 572,553 15.1875p
Shares issued @ .25p, exercise of warrant 23/1/2018 499,999 3p
Shares issued @ .25p, option exercise 16/4/2018 1,750,000 1.625p
Shares issued @ .25p, open offer shares placing 25/5/2018 71,185,447 12p
------------------------------------------------ ---------- ------------ --------
30 June 2018 474,939,144
------------------------------------------------------------ ------------ --------
10. Share premium account
30 June 30 June 31 December
2018 2017 2017
GBP GBP GBP
------------------------------------------ ------------ ------------ ------------
1 January 2018 24,636,445 17,621,763 17,621,763
Premium arising on issue of equity shares 14,770,257 7,918,921 8,116,002
Transaction costs (1,048,659) (101,320) (1,101,320)
------------------------------------------ ------------ ------------ ------------
30 June 2018 38,358,043 25,439,364 24,636,445
------------------------------------------ ------------ ------------ ------------
11. Share-based payments
(a) Warrants over ordinary shares
Details of the tranches of warrants outstanding at the period-end are as follows:
WAEP* Number WAEP* WAEP*
Number (Pence) '000 (Pence) Number (Pence)
'000 30 June 30 June 30 June '000 31 December
30 June 31 December
2018 2018 2017 2017 2017 2017
---------------------------- -------- --------- -------- --------- ------------ -------------
Outstanding as at 1 January 286,224 7 3,180 6 47,928 7
Granted during the year - - 35,203 12 287,724 12
Forfeited during the period (160) 30 (605) 31 (7,282) 28
Exercised during the year (1,073) 20 (115) 3 (42,146) 3
---------------------------- -------- --------- -------- --------- ------------ -------------
Options outstanding as at
31 December 284,991 12 37,663 13 286,224 12
---------------------------- -------- --------- -------- --------- ------------ -------------
(b) Share Options
Details of the tranches of share options outstanding at the period end are as follows:
WAEP* Number WAEP* WAEP*
Number (Pence) '000 (Pence) Number (Pence)
'000 30 June 30 June 30 June '000 31 December
30 June 31 December
2018 2018 2017 2017 2017 2017
---------------------------- -------- ---------- -------- ---------- ------------ -------------
Outstanding as at 1 January 75,123 8 197,199 73 197 73
Granted during the year 10,461 13 66,400 2 96,400 6
Expired during the year - - - - - -
Forfeited during the period (2,363) 5 (21) 75 (21,474) 2
Exercised during the year (1,750) 2 - - - -
---------------------------- -------- ---------- -------- ---------- ------------ -------------
Options outstanding as at
30 June 81,471 9 66,576 2 75,123 8
---------------------------- -------- ---------- -------- ---------- ------------ -------------
Exercisable at 30 June 10 75 176 73 123 72
---------------------------- -------- ---------- -------- ---------- ------------ -------------
* The weighted average outstanding life of vested share options is 6.7 years. The weighted average share price of outstanding options is 8.71p (2017 7.81p)
12. Loans due over one year
30 June 30 June 31 December
2018 2017 2017
GBP GBP GBP
--------------------- ----------- ----------- -----------
5 Year Secured Bonds 10,761,418 9,416,280 10,529,751
Other Loans 878,744 829,359 882,610
--------------------- ----------- ----------- -----------
11,640,162 10,245,639 11,412,361
--------------------- ----------- ----------- -----------
Amortised
finance
Balance charges
as at 31 less cash
December interest Exchange 30 June
2017 paid Adjustments 2018
-------------------------------- ----------- ---------- ------------ ------------
20 million 5 Year Secured Bonds 12,026,845 104,354 (45,427) 12,085,772
Other Loans 882,610 (3,866) - 878,744
Loan Fees (1,497,094) 172,740 - (1,324,354)
-------------------------------- ----------- ---------- ------------ ------------
Total 11,412,361 273,228 (45,427) 11,640,162
-------------------------------- ----------- ---------- ------------ ------------
On 22 May 2017 the Company announced that Nusakan Plc (formerly Greenbury S.a.) had subscribed for five year non-amortising secured bonds with an aggregate issue value of EUR20 million (the Bonds). Alongside the Bonds, the company issued 169,402,469 warrants (the "Warrants") to subscribe for new ordinary shares in the company at an exercise price of 15.1875 pence per ordinary share and an exercise period of approximately five years concurrent with the term of the Bonds, to Nusakan Plc. The Bonds are secured over the share capital of Echo Energy Limited. The Bonds have an 8% coupon and were issued at a 20% discount to par value.
A total cash fee of GBP1.7 million (EUR2 million) was payable by the Company.
The warrants were recorded within equity at fair value on the date of issuance and the proceeds of the Bonds net of issue costs were recorded as non-current liability. The coupon rate of 8% for the Bonds ensures that the company's ongoing cash outflow on interest payments remains low, conserving the company's cash resources. The effective interest rate is approximately 21.55%.
The 5-year secured Bonds are due in May 2022.
13. Subsequent events
Following the successful completion of the drilling campaign in the first half of the year, Echo announced, on 6 July, the mobilisation of a well testing/completion rig. The initial well tested was ELM-1004. During testing the operator found it challenging to completely isolate all the interpreted gas bearing zones from a deeper highly productive water bearing zone. Following the isolation of an 8 m interval at the top of the section, dry gas was successfully produced to surface via the rig de-gassing system, the operator is now evaluating options in support of an hydraulic stimulation to boost well production.
Testing of the CSo-2001(d) well determined that long term production from the adjacent Springhill formation had caused significant pressure depletion across the western flank of the field, and that the remaining gas in the underlying Tobifera will likely be insufficient to contribute economically to the Fracción D gas project. The rig subsequently moved to undertake a campaign of pulling jobs to reinstate oil production in three wells, and install a pump in CSo-80 following earlier workover activity. The Company is working to finalise an optimal completion and test programme for the EMS-1001 well. Given the ongoing nature of the evaluation work being undertaken on Fracción C,D and LLC, in accordance with our accounting policy no indicators of impairment exist. All RNS statements relating to operational activity are available at www.echoenergyplc.com.
On the 31 August Echo Energy plc announced the signing of a Letter of Intent to sign a new one year Technical Evaluation Agreement with Yacimientos Petroliferos Fiscales over the Rio Salado licence area, onshore Bolivia.
Martin Hull, the Company's new Chief Financial Officer, joined on the 1 August 2018.
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR LBMRTMBABBJP
(END) Dow Jones Newswires
September 12, 2018 02:00 ET (06:00 GMT)
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