Interim Results 2017

RNS Number : 0914N

Echo Energy PLC

04 August 2017

 

	Echo Energy PLC
	Chairman's Statement, 2017 Interim Accounts
	Echo Energy plc (Echo) is an AIM listed, Latin American focused, mid-cap gas company in the making. The Company was launched in March 2017 and is pursuing a bold and adventurous upstream growth strategy across Central and South America.
	This LATAM regional exploration / appraisal strategy is focused on accessing multi Tcf, low cost gas piped to high value growing markets across a region which has suffered from a historic period of underinvestment and where there is an immediate market for locally sourced gas.
	Corporately, Echo has already made significant progress in building the foundations for the delivery of its growth strategy. Since launch, the Company has raised some £26M of cash, secured a cornerstone investor and introduced a world class team with strong regional connections and an indisputable track record in building mid cap AIM listed gas businesses with sustainable value growth for Private Investors. In five months, Echo has secured two positioning transactions in Bolivia, one of the few remaining 'untapped' prolific hydrocarbon provinces and the key gas supply hub in the region. We expect to secure further corporate and asset transactions in Bolivia and beyond (including Argentina and the Caribbean) in the near term.  It is then the Company's intention to selectively bring in pre-identified strategic partners to the business to fund and technically de-risk the larger assets.
	Echo is an entrepreneurial, high growth vehicle led and backed by an experienced team and managed with an eye for private investors.  We believe our Company provides a compelling investment proposition for investors at this specific point in the cycle.
	James Parsons, Chairman Echo Energy Plc
	Echo Energy PLC
	Chief Executive Officer's Statement
	Since the company's relaunch it has been a very busy start for the new management team at Echo and we have already taken our first steps of creating the building blocks of a mid-cap E&P company alongside building a portfolio with multi-Tcf potential.
	In June 2017, we signed a Joint Evaluation Agreement (JEA) with Pluspetrol, a privately owned major oil & gas company in the region, giving us the opportunity to secure an 80% operated interest in the Huayco Block in Southern Bolivia.  The signing of this JEA was shortly followed by the signature of a tri-partite Technical Evaluation Agreement (TEA) between Echo, Pluspetrol and YPFB (the Bolivian National Oil Company) over the Rio Salado Block which surrounds Huayco and contains an extension of the previously identified structure.
	Both agreements will allow Echo to assess the resource prospectivity of the Greater Huayco Region whilst not committing the Company to a work programme until the sub-surface potential is fully understood.
	We see our partnership with Pluspetrol as a long-term relationship with durability and scope to broaden across Bolivia and the region as a whole. This entry into Bolivia provides the company with a toe-hold in the country underpinning the importance of the regional relationships already established.
	The coming months will see your new management team add more assets to the portfolio, continue to develop our regional partnerships and assess merits of a number of opportunities across the LatAm region where we will be focussed on delivering access to high value assets based on rigorous technical and commercial analysis. We are technically driven but nimble and opportunistic and believe that the E&P cycle is at a low point that will enable us to build a portfolio across the region whilst benefitting from what we expect will be improving markets and business environment.
	Fiona MacAulay, Chief Executive Officer Echo Energy Plc
	Echo Energy PLC
	Consolidated statement of comprehensive income
	Six months ended 30 June 2017
																			Unaudited						Unaudited					Audited
																			1 January 2017						1 January 2016					1 January 2016
																			to 30 June						to 30 June					to 31 December
																			2017						2016					2016
																			£						£					£
														Notes
	Continuing operations
	Revenue													2					-						-					-
	Cost of sales																		-						-					-
	Gross profit																		-						-					-
	Administrative expenses																		(1,287,580)						(281,672)					(1,325,362)
	Other operating income																		-						-					-
	Operating loss																		(1,287,580)						(281,672)					(1,325,362)
	Financial income																		369						114					144
	Financial expense																		(364,288)						(17,143)					(23,739)
	Share of post-tax losses of equity
	accounted joint ventures																		-						-					-
	Loss before tax																		(1,651,499)						(298,701)					(1,348,957)
	Taxation													3					-						-					-
	Loss from continuing operations																		(1,651,499)						(298,701)					(1,348,957)
	Discontinued operations
	Loss after taxation for the period from
	discontinued operations																		(24,759)						(149,992)					(5,905,227)
	Loss for the period																		(1,676,258)						(448,693)					(7,254,184)
	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																		2,121						624,689					807,370
	Total comprehensive profit/(loss) for the period																		(1,674,137)						175,996					(6,446,814)
	Loss attributable to:
	Owners of the parent																		(1,676,258)						(448,693)					(7,254,184)
	Total comprehensive profit/(loss) attributable to:
	Owners of the parent																		(1,674,137)						5,996					(6,446,814)
	Loss per share (pence)													4
	Basic																		(0.9)						(2.1)					(18.6)
	Diluted																		(0.9)						(2.1)					(18.6)
	Loss per share (pence) from continuing operations
	Basic																		(0.9)						(1.4)					(3.5)
	Diluted																		(0.9)						(1.4)					(3.5)
	Echo Energy PLC
	Consolidated statement of financial position
	As at 30 June 2017
																		Unaudited							Unaudited					Audited
																		30 June							30 June					31 December
																		2017							2016					2016
																		£							£					£
												Notes
	Non-current assets
	Property, plant and equipment																	1,957							8,303					3,647
	Other intangible assets											5						432,486							432,486					432,486
	Investments in equity-accounted
	joint ventures											6						-							-					-
																		434,443							440,789					436,133
	Current assets
	Other receivables																	118,239							686,523					235,217
	Cash and cash equivalents																	25,545,780							61,366					182,164
																		25,664,019							747,889					417,381
	Assets held for distribution																	91,808							5,680,861					89,371
																		25,755,827							6,428,750					506,752
	Current liabilities
	Trade and other payables																	(479,890)							(861,691)					(417,801)
	Liabilities directly associated with the
	assets held for distribution																	(11,864)							(47,403)					11,548)
																		(491,754)							(909,094)					9,349)
	Net current assets																	25,264,073							5,519,656					77,403
	Non-current liabilities
	Loans due in over one year												10					(10,245,639)							-					-
	Net assets																	15,452,877							5,960,445					513,536
	Equity attributable to equity holders of the parent
	Share capital											7						3,104,919							2,327,488					2,430,612
	Share premium											8						25,439,364							17,247,816					17,621,763
	Shares to be issued																	277,468							-					277,468
	Share option reserve																	103,058							84,357					85,515
	Share warrant reserve																	8,730,575							302,453					714,977
	Foreign currency translation reserve																	473,801							288,999					471,680
	Retained earnings																	(22,676,308)							(14,290,668)					(21,088,479)
	Total equity																	15,452,877							5,960,445					513,536
Echo Energy PLC
Consolidated statement of changes in equity
Six months ended 30 June 2017
																													Foreign
																	Shares					Share			Share				currency
					Retained			Share		Share							to be					option			warrant				translation
					earnings			capital		premium							issued					reserve			reserve				reserve				Total
					£			£		£							£					£			£				£				£
Six months to 30 June 2017
1 January 2017					(21,088,479)			2,430,612		17,621,763							277,468					85,515			714,977				471,680				513,536
Loss for the period					(1,676,258)			-		-							-					-			-				-				(1,676,258)
Exchange differences					-			-		-							-					-			-				2,121				2,121
Total comprehensive loss
for the period					(1,676,258)			-		-							-					-			-				2,121				(1,674,137)
New shares issued					-			674,307		7,506,397							-					-			-				-				8,180,704
Share issue costs					-			-		(101,320)							-					-			-				-				(101,320)
New share warrants issued					-			-		-							-					-			8,448,812				-				8,448,812
Warrants exercised					-			-		412,524							-					-			(412,524)				-				-
Warrants lapsed					20,690			-		-							-					-			(20,690)				-				-
Share options lapsed
in the period					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					103,058			8,730,575				473,801				15,452,877
Six months to 30 June 2016
1 January 2016					(13,841,975)			2,159,247		16,628,623							-					71,718			302,453				(335,690)				4,984,376
Loss for the period					(448,693)			-		-							-					-			-				-				(448,693)
Exchange differences					-			-		-							-					-			-				624,689				624,689
Total comprehensive loss
for the period					(448,693)			-		-							-					-			-				624,689				175,996
New shares issued					-			168,241		629,082							-					-			-				-				797,323
Share issue costs					-			-		(9,889)							-					-			-				-				(9,889)
New share warrants issued					-			-		-							-					-			-				-				-
Share options lapsed
in the period					-			-		-							-					-			-				-				-
Share-based payments					-			-		-							-					12,639			-				-				12,639
30 June 2016					(14,290,668)			2,327,488		17,247,816							-					84,357			302,453				288,999				5,960,445
Year to 31 December 2016
1 January 2016					(13,841,975)			2,159,247		16,628,623							-					71,718			302,453				(335,690)				4,984,376
Loss for the period					(7,254,184)			-		-							-					-			-				-				(7,254,184)
Exchange differences					-			-		-							-					-			-				807,370				807,370
Total comprehensive loss
for the period					(7,254,184)			-		-							-					-			-				807,370				(6,446,814)
New shares issued					-			264,065		887,329							-					-			-				-				1,151,394
New share warrants issued					-			-		-							-					-			412,524				-				412,524
Share issue costs					-			-		(9,889)							-					-			-				-				(9,889)
Share options lapsed
in the period					7,680			-		-							-					(7,680)			-				-				-
Share-based payments					-			7,300		115,700							277,468					21,477			-				-				421,945
31 December 2016					(21,088,479)			2,430,612		17,621,763							277,468					85,515			714,977				471,680				513,536
Echo Energy PLC
Consolidated statement of cash flows
Six months ended 30 June 2017
																				Unaudited						Unaudited					Audited
																				1 January 2017						1 January 2016					1 January 2016
																				to 30 June						to 30 June					to 31 December
																				2017						2016					2016
																				£						£					£
Cash flows from operating activities
Loss from continuing operations																				(1,651,499)						(298,701)					(1,348,957)
Loss from discontinued operations																				(24,759)						(149,992)					(5,905,227)
																				(1,676,258)						(448,693)					(7,254,184)
Adjustments for:
			Depreciation of property, plant and equipment																	1,690						3,212					5,431
			Impairment of intangible assets and goodwill																	-						-					5,756,250
			Loss on disposal of property, plant and equipment																	-						-					2,437
			Share of post-tax loss of equity accounted joint ventures																	-						137,906					137,906
			Share-based payments																	85,282						12,639					421,945
			Warrants issued																	-						-					412,524
			Financial income																	(369)						(114)					(144)
			Financial expense																	364,288						17,143					23,739
																				(1,225,367)						(277,907)					(494,096)
(Increase)/decrease in other receivables																				119,099						(293,730)					283,265
(Increase)/decrease in assets held for distribution																				(2,121)						7,182					(11,557)
(Decrease)/increase in trade and other payables																				(87,272)						245,758					(684,735)
Cash used in operations																				(1,195,661)						(318,697)					(907,123)
Income taxes received																				-						-					-
Net cash used in operating activities																				(1,195,661)						(318,697)					(907,123)
Cash flows used in investing activities
Interest received																				369						114					144
Interest paid																				(153,731)						-					(23,739)
Proceeds on disposal of property, plant and equipment																				-						-					-
Acquisition of equity accounted joint venture																				-						-					-
Purchase of intangible assets																				-						-					-
Purchase of property, plant and equipment																				-						(396)					(396)
Net cash used in investing activities																				(153,362)						(282)					(23,991)
Cash flows from financing activities
Net proceeds from debt																				13,346,750						200,000					-
Issue of share capital																				13,365,889						93,577					1,026,510
Share issue costs																				-						(9,889)					(9,889)
Net cash from financing activities																				26,712,639						283,688					1,016,621
Net increase/(decrease) in cash and cash equivalents																				25,363,616						(35,291)					85,507
Cash and cash equivalents at beginning of the period																				182,164						96,657					96,657
Cash and cash equivalents at end of the period																				25,545,780						61,366					182,164
Echo Energy PLC
Notes to the interim financial information
Six months ended 30 June 2017
1.		Accounting policies
		General information
		The interim financial information is for Echo Energy PLC ("the company") and subsidiary undertakings (together, the "Group"). The company is registered in England and Wales and incorporated under the Companies Act 2006. The consolidated financial information is presented in GBP ("£") unless otherwise stated.
		Basis of preparation
		The interim financial information, for the period from 1 January 2017 to 30 June 2017, has been prepared under the historical cost convention and in accordance with International Financial Reporting Standards and International Accounting Standards as adopted by the European Union, and on the going concern basis.  They are in accordance with the accounting policies set out in the statutory accounts for the year ended 31 December 2016 and are expected to be applied for the year ended 31 December 2017.
		The Interim Report is unaudited and does not constitute statutory financial statements.  The financial information for the period ended 30 June 2016 does not constitute statutory accounts, as defined in section 435 of the Companies Act 2006 but is based on the statutory financial statements for the year ended 31 December 2016.  Those accounts, upon which the auditors issued a qualified opinion in relation to the operation of the joint venture arrangements relating to the group's 25 per cent. working interest in the East Ghazalat production licence, have been delivered to the Registrar of Companies.
		The interim consolidated financial statements for the six months ended 30 June 2017 have been prepared in accordance with IAS 34, Interim Financial Reporting.
		The operations of Echo Energy PLC are not affected by seasonal variations.
		The directors do not propose a dividend for the period (2016: nil).
		The Interim Report for the six months ended 30 June 2017 was approved by the Directors on 3rd August 2017
		Copies of the Interim Report are available from the Company's website  www.echoenergyplc.com.
		Going concern
		The financial information has been prepared assuming the Group will continue as a going concern. Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors pursuant to laws or regulations.
		The assessment has been made based on the Group's anticipated activities which have been included in the financial forecast for the years 2017-2018.
		To support the new LATAM strategy the group has, during the reporting period, completed a number of institutional funding rounds and one open offer with each equity fundraise being placed at nil discount to market. This funding will be used to acquire new assets and fund the administrative costs of the group.
		Based on the above, the directors have formed a judgment that the going concern basis should be adopted in preparing the interim financial information. The interim financial information does not include any adjustments that may be required should the Group be unable to continue as a going concern.  If the Group were unable to continue as a going concern, then adjustments would be necessary to write assets down to their recoverable amounts, non-current assets and liabilities would be reclassified as current assets and liabilities and provisions would be required for any costs associated with closure.
		The directors continue to explore all forms of potential fundraising at both a corporate and asset level.
		In relation to Ksar Hadada, management's intention remains to secure a farm-in or investment partner to cover programme costs.
		Based on the above, the directors have formed a judgment that the going concern basis should be adopted in preparing the financial statements.
		Should the Group be unable to continue trading, adjustments would have to be made to reduce the value of the assets to their recoverable amounts, to provide for further liabilities which might arise and to classify fixed assets as current.
2.		Business segments
		The Group has adopted IFRS 8 operating segments from 1 October 2009. Per IFRS 8, 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 decision making 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.				Ksar Hadada
		The previously reported segments of Ribolla Basin CBM assets and Rivara have been classified as a discontinued operation and has been excluded from the analysis below.
		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.
		The Group did not generate any revenue during the six month period to 30 June 2017, or in the six month period to 30 June 2016, or the year to 31 December 2016.
																Parent
																company						Ksar Hadada					Consolidation						Total
																£						£					£						£
		Six months to 30 June 2017
		Interest revenue														369						-					-						369
		Interest expense														(364,278)						(10)					-						(364,288)
		Depreciation														1,690						-					-						1,690
		Impairment of
		intangible assets														-						-					-						-
		Income tax														-						-					-						-
		Loss for the period
		before taxation														(1,634,891)						(41,367)					24,759						(1,651,499)
		Assets														26,847,520						432,640					(1,181,698)						26,098,462
		Liabilities														(10,701,192)						(1,120,469)					1,096,132						(10,725,529)
		Six months to 30 June 2016
		Interest revenue														114						-					-						114
		Interest expense														(17,143)						-					-						(17,143)
		Depreciation														3,212						-					-						3,212
		Impairment of
		intangible assets														-						-					-						-
		Income tax														-						-					-						-
		Loss for the period
		before taxation														(5,929)						(1,195)					(291,577)						(298,701)
		Assets														5,331,790						435,810					(4,578,922)						1,188,678
		Liabilities														(843,435)						(1,048,715)					1,030,459						(861,691)
		Year to 31 December 2016
		Interest revenue														57,331						-					(57,187)						144
		Interest expense														(23,739)						-					-						(23,739)
		Depreciation														5,431						-					-						5,431
		Impairment of
		intangible assets														-						-					-						-
		Income tax														-						-					-						-
		Loss for the period
		before taxation														(4,487,164)						(34,752)					3,172,959						(1,348,957)
		Assets														1,579,091						433,226					(1,158,803)						853,514
		Liabilities														(411,350)						(1,079,688)					1,073,237						(417,801)
2.		Business segments
		The geographical split of non-current assets arises as follows:
																United
																Kingdom											Overseas						Total
																£											£						£
		30 June 2017
		Intangible assets																				-					432,486						432,486
		Property, plant and equipment																				1,957					-						1,957
		30 June 2016
		Intangible assets																				-					432,486						432,486
		Property, plant and equipment																				8,303					-						8,303
		31 December 2016
		Intangible assets																				-					432,486						432,486
		Property, plant and equipment																				3,647					-						3,647
3.		Taxation
		The Group has tax losses available to be carried forward in certain subsidiaries and the parent. With anticipated substantial lead times for the Group's projects, and the possibility that these may therefore expire before their use, it is not considered appropriate to anticipate an asset value for them.
		No tax charge has arisen during the six month period to 30 June 2017, or in the six month period to 30 June 2016, or the year to 31 December 2016.
4.		Loss per share
		The calculation of basic and diluted loss per share at 30 June 2017 was based on the loss attributable to ordinary shareholders of £1,676,258 (six month period to 30 June 2016: £448,693, year to 31 December 2016: £7,254,184). The weighted average number of ordinary shares outstanding during the period ending 30 June 2017 and the effect of dilutive ordinary shares to be issued are shown below.
																30 June 2017											30 June 2016						31 December 2016
																£											£						£
		Net loss for the period																				(1,676,258)					(448,693)						(7,254,184)
		Basic weighted average ordinary shares
		in issue during the period																				186,159,251					21,644,235						38,962,494
		Diluted weighted average ordinary shares
		in issue during the period																				186,159,251					21,644,235						38,962,494
		Loss per share (pence)
		Basic																				(0.9)					(2.1)						(18.6)
		Diluted																				(0.9)					(2.1)						(18.6)
		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 ending 30 June 2017.
		Deferred shares have been excluded from the calculation of loss per share due to their nature. Please see note 7 for details of their rights.
5.		Other intangible assets
		Development and exploration
															Rivara gas													Ksar Hadada
															storage									Ribolla Basin				exploration
															facility									CBM assets				acreage					Total
															£									£				£					£
		Six month period 30 June 2017
		Cost
		1 January 2017											5,756,250											4,501,130				1,513,315					11,770,695
		Exchange differences											156,845											122,646				-					279,491
		Additions (net of credits received)											-											-				-					-
		30 June 2017											5,913,095											4,623,776				1,513,315					12,050,186
		Amortisation
		1 January 2017											5,756,250											4,501,130				1,080,829					11,338,209
		Exchange differences											156,845											122,646				-					279,491
		30 June 2017											5,913,095											4,623,776				1,080,829					11,617,700
		Carrying value
		30 June 2017											-											-				432,486					432,486
		31 December 2016											-											-				432,486					432,486
		Six month period to 30 June 2016
		Cost
		1 January 2016											4,950,206											3,870,839				1,517,641					10,338,686
		Exchange differences											624,169											488,072				-					1,112,241
		Additions											-											-				(4,326)					(4,326)
		30 June 2016											5,574,375											4,358,911				1,513,315					11,446,601
		Amortisation
		1 January 2016											-											3,870,839				1,080,829					4,951,668
		Exchange differences											-											488,072				-					488,072
		30 June 2016											-											4,358,911				1,080,829					5,439,740
		Carrying value
		30 June 2016											5,574,375											-				432,486					6,006,861
		Year to 31 December 2016
		Cost
		1 January 2016											4,950,206											3,870,839				1,517,641					10,338,686
		Exchange differences											806,044											630,291				-					1,436,335
		Disposals											-											-				(4,326)					(4,326)
		31 December 2016											5,756,250											4,501,130				1,513,315					11,770,695
		Amortisation
		1 January 2016											-											3,870,839				1,080,829					4,951,668
		Exchange differences											-											630,291				-					630,291
		Impairment charge for year											5,756,250											-				-					5,756,250
		31 December 2016											5,756,250											4,501,130				1,080,829					11,338,209
		Carrying value
		31 December 2016											-											-				432,486					432,486
		The primary intangible assets are all internally generated.
		For the purpose of impairment testing of intangible assets, recoverable amounts have been determined based upon the value in use of the Group's three projects.
		Rivara gas storage facility
		The Group holds a 100% interest in Rivara Gas Storage srl. Intangible assets include an amount of £5,756,000 with respect to project expenditure. The regional council, Regione Emilia Romagna, where the project is located is currently denying authorisation for project development. However authorisation has been granted by the national government. As a result Rivara Gas Storage srl has appealed against this decision to the Emilia Romagna Bologna Administrative Court.
		Whilst the Group has obtained third party legal opinions regarding the appeal and believe that they would be successful in their appeal it has been decided, for strategic reasons, to close its Italian operations and therefore this asset has been impaired in full during the year to 31 December 2016.
6.		Investments in equity-accounted joint ventures
																						30 June 2017					30 June 2016						31 December 2016
																						£					£						£
		Cost																				294,891					294,891						294,891
		Share of post-tax losses of equity accounted joint ventures
		1 January 2017																				294,891					156,985						156,985
		Share of post-tax losses of equity accounted joint ventures for the period																				-					137,906						137,906
		30 June 2017																				294,891					294,891						294,891
		Carrying value at 30 June 2017																				-					-						-
		During the period, the Group disposed of its 50% interest in Independent Resources (Egypt) Limited to its joint venture partner Nostra Terra Oil & Gas Company plc (the 'buyer') a UK resident company whose shares are traded on the AIM market of the London Stock Exchange.
		The terms of the disposal provide for a total consideration of USD $500,000, split into three tranches.  A payment of USD $100,000 is due when the Egyptian General Petroleum Corporation approve the registration of any member of the buyer's group as a party to the concession.  The balance of the consideration is payable in two tranches triggered upon achievement of two performance milestones, namely production of 800 bopd from the area for 30 consecutive days and production of 1,000 bopd from the area for 30 consecutive days.
7.		Share capital
																						30 June 2017					30 June 2016						31 December 2016
																						£					£						£
		Issued, called up and fully paid
		361,473,066 ordinary shares of 0.25p
		(June 2016: 1,262,504,294 December 2016: 2,293,479,294 ordinary shares of 0.01p)
		1 January 2017																				2,430,612					2,159,247						2,159,247
		Equity shares issued																				674,307					168,241						271,365
		30 June 2017																				3,104,919					2,327,488						2,430,612
		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.
		In addition to the 0.25p ordinary shares detailed above, as part of capital reorganisations in 2015 and 2016, 202,591,368 deferred shares with a nominal value of 0.9p and 419,905,876 2016 deferred shares with a nominal value of 0.09p have been created.  The deferred shares and the 2016 deferred shares have no value or voting rights and the shareholders were not issued with a share certificate, nor are they listed on AIM. These shares remain issued, called up and fully paid at the period end.
		During the period warrant holders exercised a total of 1,006,157,250 warrants in order to acquire 0.01p shares at either 0.08p or 0.12p per share.
		Prior to 22 May 2017 the company issued 3,222,649,508 0.01p shares in addition to warrants exercised.
		On 22 May 2017 the company consolidated its shares into 0.25p ordinary shares on the basis of one 0.25p ordinary share per every 25 0.01p ordinary shares.
		On 2 June 2017 the company issued 100,570,824 0.25p ordinary shares.
8.		Share premium account
																						30 June 2017					30 June 2016						31 December 2016
																						£					£						£
		1 January 2017																				17,621,763					16,628,623						16,628,623
		Premium arising on the issue of equity shares																				7,918,921					629,082						1,003,029
		Transaction costs																				(101,320)					(9,889)						(9,889)
		30 June 2017																				25,439,364					17,247,816						17,621,763
9.		Warrants over ordinary shares
		Details of the tranches of warrants outstanding at the period-end are as follows:
		Date of grant					01/01/2017			Issued/						30/06/2017							Date from which					Lapse					Exercise
							Number of			lapsed in						Number of							warrants may be					date					price per
							warrants			the year						warrants							first exercised										warrants
		08/05/2015					368,000			(368,000)						-							08/05/2015					28/05/2017					37.50p
		08/05/2015					160,000			-						160,000							08/05/2015					28/05/2018					30p
		28/05/2015					1,232,000			(1,232,000)						-							28/05/2015					28/05/2017					37.50p
		21/07/2015					348,961			(348,961)						-							21/07/2015					28/05/2017					37.50p
		16/11/2015					5,333,333			-						5,333,333							16/11/2015					18/11/2017					25p
		16/11/2015					240,000			-						240,000							16/11/2015					18/11/2018					18p
		09/12/2016					25,000			(25,000)						-							09/12/2016					09/12/2018					3p
		09/12/2016					15,246,290			(14,746,291)						499,999							09/12/2016					09/12/2018					2p
		09/03/2017					-			2,400,000						2,400,000							09/03/2017					09/03/2022					1.625p
		09/03/2017					-			61,538,462						61,538,462							09/03/2017					09/03/2022					3p
		20/04/2017					-			3,000,000						3,000,000							20/04/2017					20/04/2022					1.625p
		22/05/2017					-			218,785,185						218,785,185							22/05/2017					22/05/2022					1.52p
		A charge to the profit and loss account has been taken in compliance with IFRS2 in respect of the fair value of warrants
		issued to brokers in relation to fundraising services provided.
10.		Loans due in over one year
																					30 June 2017						30 June 2016					31 December 2016
																					£						£					£
		5 year secured bonds																			9,416,280						-					-
		Other Loans																			829,359						-					-
																					10,245,639						-					-
On 22 May 2017 the Company announced that Greenbury S.A. ("Greenbury") had subscribed for a 5-year non-amortising secured bonds with an aggregate issue value of approximately £16 million (the "Bonds"). Alongside the Bonds, the company issued 169,402,469 warrants to subscribe for new ordinary shares in the Company at an exercise price of 15.1875 pence (on a post consolidated basis) per ordinary share and an exercise period of approximately five years, concurrent with the term of the Bonds, to Greenbury (the "Warrants"). The Bonds are secured over the share capital of Echo Energy Plc. The Bonds have an 8% coupon and were issued at a 20% discount to par value, A total cash fee of approximately £1.7 million (€2 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 notes net of issue costs were recorded as non-current liability. The coupon rate of 8% for the Bonds ensures that the Company's on-going cash out-flow 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.
11.		Discontinued operations
		Following the relaunch in March 2017, a strategic review of the existing assets was undertaken. Specifically, and as a result of the company stated agreement to avoid conflict of interest between Sound Energy plc and its officers which includes Echo exiting its Italian business, the directors have decided to terminate and exit all activities in Italy.  The Italian interests have therefore been classified as discontinued.
		On the 15th of June 2017, the Company announced it had entered into an agreement to sell its 25% effective working interest in its Egyptian East Ghazalat licence to its Joint Venture partner, Nostra Terra Oil & Gas plc (the buyer).  The sale was for a total consideration of USD $500,000, split into three tranches.  A payment of USD $100,000 is due when the Egyptian General Petroleum Corporation approves the registration of any member of the buyer's Group as a party to the concession.  The balance of the consideration is payable in two tranches triggered upon achievement of two performance milestones, namely production of 800 bopd from the area for 30 consecutive days and production of 1,000 bopd from the area for 30 consecutive days. The consideration is payable in either cash or shares.  Where the consideration is shares, the quantity of shares issued shall be determined by dividing the relevant consideration by the lower of: (i) the mid-market closing price of the buyer shares as traded on AIM on the dealing day prior to the date of this Agreement; and (ii) the mid-market closing price of the buyer shares as traded on AIM on the dealing day prior to the date upon which the relevant Consideration is payable.
		The results of the Italian and Egyptian operations, incorporating consolidation adjustments, are presented below:
																						30 June 2017					30 June 2016					31 December 2016
																						£					£					£
		Revenue																				-					-					-
		Administrative expenses																				-					(15,538)					(5,770,580)
		Operating loss before impairment																				-					(15,538)					(5,770,580)
		Impairment of the Investment in joint venture assets																				(24,759)					(137,906)					-
		Impairment of goodwill arising on acquisition of Independent Energy																				-					-					-
		Solutions srl - consolidation adjustment
		Operating loss after impairment																				(24,759)					(153,444)					(5,770,580)
		Financial income																				-					45,200					3,259
		Financial expense																				-					(41,748)					-
		Share of post-tax losses of equity
		accounted joint ventures																				-					-					(137,906)
		Loss on ordinary activities before taxation																				(24,759)					(149,992)					(5,905,227)
		Taxation																				-					-					-
		Loss for the year from discontinued operations																				(24,759)					(149,992)					(5,905,227)
		The major classes of assets and liabilities of  Italian operations classified as held for distribution to equity holders of the
		parent as at 30 June 2017 are as follows:
																						30 June 2017					30 June 2016					31 December 2016
																						£					£					£
		Assets
		Intangible assets - fully impaired																				-					-					-
		Property, plant and equipment																				-					9					-
		Work in progress on Approved Projects																				-					5,574,375					-
		Other receivables																				89,042					99,643					86,686
		Cash and cash equivalents																				2,766					6,834					2,685
		Assets held for distribution																				91,808					5,680,861					89,371
		Liabilities
		Trade and other payables																				-					(2,559)					-
		Other and social security																				(824)					-					-
		Accruals																				(11,040)					(44,844)					(11,548)
		Liabilities directly associated with the  assets held for distribution																				(11,864)					(47,403)					(11,548)
		Net assets directly associated with disposal group																				79,944					5,633,458					77,823
		The net cash flows incurred by Italian operations are as follows:
																						Six Months to 30 June 2017					Six Months to 30 June 2016					Year to 31 December 2016
																						£					£					£
		Operating																				81					(1,238)					(1,958)
		Investing																				-					-					-
		Financing																				-					-					-
		Net cash (outflow)/inflow																				81					(1,238)					(1,958)
		Loss per share (pence)
																							Six Months to 30 June 2017				Six Months to 30 June 2016					Year to 31 December 2016
		Liabilities directly associated with the assets held for distribution																					(0.0)				(0.7)					(15.2)
		Liabilities directly associated with the assets held for distribution																					(0.0)				(0.7)					(15.2)
		Immediately before the classification of Italian operations as discontinued operations, the recoverable amount was estimated for certain items of property, plant and equipment and no impairment was identified. No adjustment has been made to reduce the carrying amount of the assets in the disposal group to their fair value less costs to distribute.
		Immediately before the classification of Italian operations as discontinued operations, the recoverable amount was estimated for the operations intangible assets and these were impaired in full.
12.		Events arising after the reporting period
		On the 5th July 2017 Echo announced the appointment of Fiona Macaulay as Chief Executive Officer and Director of the Company.  Fiona has over 30 years of experience in the oil and gas industry, most recently as Chief Operating Officer and Technical Director of Rockhopper Exploration plc. On the 26th of July 2017, the Company announced the signature of a Technical Evaluation Agreement (TEA) for the Rio Salado Block, onshore Bolivia.  The TEA between the Company, Pluspetrol and YPFB (Yacimientos Petrolíferos Fiscales Bolivianos) was signed on 25 July 2017 at the YPFB 2017 Gas & Oil Congress in Santa Cruz, Bolivia. This agreement will enable the companies to progress a technical evaluation of the block over the next 12 months. On completion of the Technical Evaluation the companies will have the opportunity to negotiate a commercial agreement with YPFB which would define a work programme and is likely to include the drilling of an exploration well.   The Rio Salado Block, which surrounds the Huayco Block, contains an extension of the structure previously identified by the Company. As a result, the Company's seismic reprocessing programme for the Huayco Block will now be extended to incorporate additional data over the Rio Salado acreage for a minimal incremental cost over the greater Huayco area.   The acquisition of an interest by Echo Energy in Rio Salado remains contingent on final commercial terms being agreed and accordingly the Company does not have an interest or the right to acquire any interest at this stage during the non-exclusive evaluation period
Registered office
Echo Energy plc
Tower Bridge House, St. Katharine's Way, London E1W 1DD
Email: [e-mail]
Commercial office
4th Floor, 40 George Street, London, W1U 7DW
Telephone: [phone]
Email: [e-mail]

 

END

 

 

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