Icon Energy Limited Annual Report 2022

ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2022 NOTE 8 - LEASES (Continued) 30 June 2022 30 June 2021 $ $ Depreciation charge of right‐of‐use assets (included in depreciation expenses) Building 75,394 74,067 75,394 74,067 Interest expense (included in finance cost) 5,211 7,823 The total cash outflow for leases 82,579 64,457 - 3,490,836 - (208,723) - (3,282,113) - - 4,353,713 - - 208,723 678,262 4,144,990 5,031,976 4,353,713 Movements in the carrying amounts for each class of provision between the beginning and the end of the current financial year: Balance at end of the year The Group had signed a contract to carry out restoration work in the second quarter of the 2020 calendar year but was delayed due to COVID-19 and commenced on 30 December 2020. The restoration provision recognised for each tenement is periodically reviewed and updated based on the facts and circumstances available at the time. Changes to the estimated future costs are recognised in the Consolidated Statement of Financial Position by adjusting both the restoration and rehabilitation asset and provision. Such changes trigger a change in future financial charges. Consolidated Entity Restoration expenditure Restoration provision represents the present value of estimated costs for future restoration of land explored by the Consolidated Entity at the end of the exploration activity. Decrease in the restoration provision Current Restoration provision Balance at beginning of the year NOTE 9 - PROVISIONS The Group leases its head office building. A renewal of the current lease contract was signed for a further term of one year commencing in February 2022 and ending in February 2023. It is expexcted that the lease will be renewed for another year effective Balance at beginning of the year Restoration provision As at 30 June 2021, the first well, Halifax No.1, was successfully plugged over the deep gas zones. Originally it was estimated that the entire program for the five wells would take about 35 days if the program proceeded without problems. Problems encountered in Halifax resulted in a significant blow-out in time and costs. The well was suspended for later testing over the Callamurra Sandstone. Non-Current Reclassification from current provision Increase in the restoration provision Balance at end of the year At 30 June 2022 the non-current provision is based on the updated estimate provided by an independent assesser in August 2022 which is based on the actual costs incurred in rehabilitating Redland with consideration of the cost increases in the current market. This is seen as the best estimate of future expected costs to finalise rehabilitation. The liability for restoration is discounted to present value and increased by $678,262, increasing a corresponding asset by the same amount. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Movements in carrying amounts Management bases its judgements, estimates and assumptions on historical and on other various factors including expectations of future events, management believes to be reasonable under the circumstances. CONSOLIDATED ENTITY Icon Energy Annual Report 2022 45