Icon Energy Limited Annual Report 2023

Icon Energy Annual Report 2023 47 ICON ENERGY LIMITED AND ITS CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2023 NOTE 1 - REPORTING ENTITY AND BASIS OF ACCOUNTING - - The 30 June 2023 end of year financial statements have been prepared on a going concern basis as management do not intend to liquidate the entity nor cease operations and have determined that the Company does not meet the threshold of having no realistic alternative but to do so. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and other authorative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The financial statements of Icon Energy Limited and its controlled entities comply with all International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board. Icon Energy Limited is a listed public company, incorporated and domiciled in Australia. The Company's registered office is located at Level 3, 2 Corporate Court, Bundall Queensland 4217. The Group is a for-profit entity, with the primary activity during the year related to the renewal of ATP 855. It is a requirement of the Australian Accounting Standards, that ‘when preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. An entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading or has no realistic alternative but to do so. When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern, the entity shall disclose those uncertainties. The financial statements cover Icon Energy Limited (the "Company") and its controlled entities as a Consolidated Entity (together referred to as the "Consolidated Entity" or the "Group") for the year ended 30 June 2023 and were authorised for issue in accordance with a resolution of the Board of Directors on 29 September 2023. The financial statements have been prepared on an accrual and historical cost basis, except for provisions that have been measured at the present value of board of directors' best estimate of the expenditure required to settle the present obligation at the end of the reporting period. All amounts are presented in Australian dollars, unless otherwise noted. This is also the functional currency of the parent. Under Section 292 of the Petroleum and Gas (Production and Safety) Act 2004 the Company is required to ensure that all wells are decommissioned from use before the tenure or authority ends, with such obligation persisting after the end of the tenure. At the date of expiry of ATP 855 The Group had six wells that had not been decommissioned as prescribed under the Petroleum and Gas (Production and Safety) Act 2004. The director’s have estimated the cost of performing the required decommissioning and rehabilitation work to be $4,746,017. after the reporting period, the Restoration Provision in respect to ATP 855 of $4,746,017 was reclassified from non-current to current liabilities. Details of Icon Energy Limited accounting policies are included in Note 24. On 5 September 2023 the Hearing in the supreme Court of Queensland took place. Her Honour reserved her decision and will deliver a written judgement, the timing of which is uncertain but could take up to several months. At the date of signing the financial statements, the outcome of the JR review is unknown. The going concern basis of preparation contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business and at the amounts stated in the financial report. The Group recorded an operating loss for the year ended 30 June 2023 of $5,537,787 (2022: $1,457,076) and net operating cash outflows for the 12 months ended 30 June 2023 was $1,501,747 (2022: $1,121,841). The Group’s current liabilities exceeded its current assets by $2,577,588. exploration and Evaluation Expenditure with a carrying value of $3,937,029 was derecognised and written off; and Going concern On 14 November 2022 the Company filed an application in the Supreme Court of Queensland to judicially review the decision of the Delegate (JR Application) to refuse to receive or process the Renewal Application. On 4 October 2022, the Company lodged an application to the Queensland Department of Resources (Department of Resources) to renew ATP 855 (Renewal Application). On 1 November 2022 the Company was notified in writing by the Department of both the expiry of ATP 855 and the termination of Potential Commercial Areas 172 – 179. As a consequence of ATP 855 expiring on 1 November 2022, and in accordance with the requirements of the Australian Accounting Standards, the following accounting was applied at 30 June 2023: Notes to the Consolidated Financial Statements for the year ended 30 June 2023