AGL prepayment still has about $3.3 million out of the $3.75...

AGL prepayment still has about $3.3 million out of the $3.75 million from the AGL pre-payment as per section 17. Contract Liabilities.

Refer to note 2c Going Concern with respect to current liquidity risk.

2c Going Concern notes

The Directors, based on their review of cash flow forecasts and management’s assessment, confirm that the going concern basis of accounting remains appropriate and recognise that additional funding is required to ensure that it can continue to fund its operations and meet its short-term commitments for the twelve month period from the date of this financial report. The Company in conjunction with its Joint Venture partners are currently finalising the completion of an Odin gas well. The Directors believe this well will provide sufficient cash flows to the Company by mid to late November 2024 to fund its short term financial liabilities.

To meet the Company’s short term funding requirements, the Directors have arranged for the following financial commitments: o Glennon Small Companies Limited (GSC), a current debt provider to the Company and an entity associated with Director Michael Glennon, has provided $880,000 of cash to the Company since 30 June 2024. In addition, GSC has provided a debt facility increase of $2,000,000 (for a total of $2,880,000). The loans are due and payable on 31 December 2025, which is subsequent to when production from the Odin gas field is enhanced. The Company will use part of the cash balance to settle $1,000,000 of short term loans due and payable in October 2024.

The Directors have engaged PAC Partners to seek new equity investments, including considerations as to the refinance of the Company’s debt facilities. Based on these facts, the Directors consider the going concern basis of preparation to be appropriate for this financial report. Should the Company be unsuccessful in raising additional funds through the issue of new equity, additional loan funding or should any of the aforementioned commitments not materialise, there is a material uncertainty which may cast significant doubt whether the Group will be able to continue as a going concern and therefore, whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

The Company recognized an impairment of $12,719,734 on its oil and gas properties in the Vali gas field. The reasons for the impairment include:

• Production issues encountered at the Vali-2 and Vali-3 wells.

• Lower-than-expected economic performance of the field.

• Increased discount rates due to rising market interest rates.

The impairment was calculated based on the Net Present Value (NPV) of expected future cash flows, incorporating revised production forecasts and current market conditions. The key assumptions used in the impairment assessment included:

• Updated production profiles detailing the expected production volumes.

• Commodity price forecasts based on contracted gas prices, reflecting the actual contractual terms and agreements in place.

• Operating costs itemizing significant expected costs involved in the operation.

• A discount rate of 12.78% was applied, reflecting higher market interest rates and the risk profile of the project.

• The sales revenue is based on contracted gas prices, which provides a fixed basis for future revenue projections, and estimated future production volumes.