Indonesia Energy (INDO) - 2024 Q2 - Quarterly Report

Financial Performance - Total revenue for the six months ended June 30, 2024, was $1,443,388, a decrease of 21.6% compared to $1,841,255 for the same period in 2023[4] - The net loss for the six months ended June 30, 2024, was $2,099,146, compared to a net loss of $1,621,164 for the same period in 2023, representing an increase in loss of 29.5%[4] - The company reported a basic and diluted loss per ordinary share of $0.26 for the six months ended June 30, 2024, compared to $0.16 for the same period in 2023[4] - The Company reported a net loss per ordinary share for the six months ended June 30, 2024, with basic and diluted net loss per share being equal due to anti-dilutive effects of potential securities[26] - The Company reported a net loss of $2,099,146 and net cash used in operating activities of $700,941 for the six months ended June 30, 2024[71] Operating Costs and Expenses - Operating costs and expenses for the same period were $3,334,492, down from $3,786,153, reflecting a reduction of 11.9%[4] - The company incurred lease operating expenses of $1,405,429 for the six months ended June 30, 2024, compared to $1,627,160 for the same period in 2023, a reduction of 13.6%[4] - Total operating lease costs for the six months ended June 30, 2024, were $460,636, a decrease of 39% from $755,787 in the same period of 2023[57] Assets and Liabilities - Total current assets decreased to $5,108,847 as of June 30, 2024, from $6,080,098 as of December 31, 2023, a decline of 16%[2] - Total liabilities increased to $4,396,980 as of June 30, 2024, compared to $3,034,813 as of December 31, 2023, an increase of 45%[2] - Shareholders' equity decreased to $13,076,029 as of June 30, 2024, from $14,689,868 as of December 31, 2023, a decline of 11%[2] - Cash and cash equivalents, along with restricted cash, totaled $2,636,724 as of June 30, 2024, down from $3,997,187 at the beginning of the period, a decrease of 34.2%[12] - The Company’s total property and equipment, net, decreased to $62,777 as of June 30, 2024, from $109,017 as of December 31, 2023, due to accumulated depreciation[35] Future Plans and Commitments - The company plans to drill one new production well at the Kruh Block in 2025, with an additional 13 wells to be drilled between 2025 and 2028, pending funding availability[14] - The Company has total commitments of $134,924,642 related to its Kruh Block and Citarum Block operations as of June 30, 2024[67] - The Company anticipates drilling one new production well at Kruh Block in early 2025, with 13 additional wells planned between 2025 and 2028, subject to funding availability[73] Debt and Financing - The Company incurred a working capital loan of $248,447 on May 10, 2024, with a maturity date of November 9, 2024, at an interest rate of 12% per annum[36] - The Company entered into an agreement with L1 Capital to increase the Second Tranche Amount from $2,000,000 to $5,000,000[39] - The total proceeds from both tranches of the Notes supported oil well drilling of the K-27 and K-28 wells and working capital[45] - The Company has financed operations primarily through cash flow from operations, loans, and equity financing, with an ATM Agreement allowing for gross offerings of up to $9,600,000[72] - A total of 2,981,253 ordinary shares have been issued through the ATM, generating net proceeds of $7,794,843 from January to September 2024[76] Accounting and Reporting - The Company is evaluating the impact of recently issued accounting standards on its financial statements, including ASU 2023-07 and ASU 2023-09, which enhance segment reporting and income tax disclosures, respectively[19][20] - The Company has elected to adopt ASU 2020-06 as of January 1, 2022, impacting the accounting treatment for convertible notes[41] - The Company has not recognized a "right of use" asset or lease liability for short-term leases under ASC 842[55] Impairment and Depletion - The Company recorded no impairment to oil and gas property for the six months ended June 30, 2024, as future net revenues exceeded carrying balances[33] - The Company’s accumulated impairment for oil and gas property remained unchanged at $11,859,183 as of both June 30, 2024, and December 31, 2023[31] - The accumulated depletion for oil and gas properties subject to amortization for the six months ended June 30, 2024, was $258,850, compared to $551,225 for the same period in 2023[33] Taxation - The effective tax rate for the six months ended June 30, 2024, was 0%, consistent with the same period in 2023[60]