INDO 6-K
Indonesia Energy Corp Ltd (INDO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2026
Commission File Number 001-39164
(Translation of registrant’s name into English)
GIESMART PLAZA 7th Floor
Jl. Raya Pasar Minggu No. 17A
Pancoran – Jakarta 12780
Indonesia
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
INCORPORATION BY REFERENCE
This report on Form 6-K (“Form 6-K Report”) shall be deemed to be incorporated by reference into the shelf registration statement on Form F-3, as amended (Registration Number 333-278175) of Indonesia Energy Corporation Limited, a Cayman Islands exempted company (the “Company”), declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on May 31, 2024 (“Registration Statement”), and into each prospectus or prospectus supplement outstanding under the Registration Statement, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached as Exhibit 99.1 to this Form 6-K Report are the unaudited condensed consolidated financial statements of the Company as of June 30, 2026 and for the six-month periods ended June 30, 2026 and 2025, respectively.
Attached as Exhibit 99.2 to this Form 6-K Report is an Operating and Financial Review for the Company’s six-month periods ended June 30, 2026 and 2025, respectively.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Form 6-K Report and the exhibits hereto contain certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”, “intend”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements in this Form 6-K Report and the exhibits hereto are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.
Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict and are subject to significant risks and uncertainties that are described more fully in “Item 3. Key Information—D. Risk Factors” on our annual report on Form 20-F filed with the SEC on April 29, 2026. Any of these factors or a combination of these factors could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Fluctuations in our future financial results may negatively impact the value of our ordinary shares. In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include among other things:
| ● | Our overall ability (including our anticipated timing) to meet our goals and strategies, including our plans to continue to conduct seismic interpretation activities, and drill additional wells at Kruh Block, to develop and ultimately drill wells at Citarum Block or acquire rights in additional oil and gas assets in the future; | |
| ● | The economic and capital markets impact of macro-economic and other conditions beyond our control (such as military activities involving Iran, Israel and other Middle Eastern countries, the war between Russia and Ukraine, the conflict between Israel and Hamas, inflation, interest rates, tariffs and the political situation in Indonesia) on the demand for our oil and gas products in Indonesia and the price of our oil and gas products; | |
| ● | Our ability to estimate our oil reserves; | |
| ● | Our ability to explore, acquire, develop and exploit oil and gas assets outside of Indonesia, including our announced exploration of potential opportunities in Brazil; | |
| ● | Our ability to anticipate our capital needs, financial condition and results of operations; |
| 2 |
| ● | The anticipated prices for, and volatility in the prices for, oil and gas products and the growth of the oil and gas market in Indonesia and worldwide; | |
| ● | Our expectations regarding our relationships with the Indonesian government (“Government”) and its oil and gas regulatory agencies; | |
| ● | Relevant Government policies and regulations relating to our industry; and | |
| ● | Our corporate structure and related laws, rules and regulations. |
Should one or more of the foregoing risks or uncertainties materialize, should any of our assumptions prove incorrect, or should we be unable to address any of the foregoing factors, our actual results may vary in material and adverse respects from those projected in these forward-looking statements. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects, on us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable laws. If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.
| 3 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| INDONESIA ENERGY CORPORATION LIMITED | ||
| Dated: September 24, 2026 | By: | /s/ Frank Ingriselli |
| Name: | Frank Ingriselli | |
| Title: | President | |
| 4 |
EXHIBIT INDEX
| Exhibit Number | Description | |
| 99.1 | Unaudited condensed consolidated financial statements of the Company as of June 30, 2026 and for the six-month periods ended June 30, 2026 and 2025 | |
| 99.2 | Operating and Financial Review for the six-month periods ended June 30, 2026 and 2025 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| 5 |
EXHIBIT 99.1
INDONESIA ENERGY CORPORATION LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Accounts receivables | ||||||||
| Prepayment and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Restricted cash – non-current | ||||||||
| Property and equipment, net | ||||||||
| Oil and gas property - subject to amortization, net | ||||||||
| Oil and gas property - not subject to amortization | ||||||||
| Right of use assets, net | ||||||||
| Deferred charges | ||||||||
| Other non-current assets | ||||||||
| Total non-current assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and equity | ||||||||
| Current liabilities | ||||||||
| Accounts payables | $ | $ | ||||||
| Amount due to a related party | ||||||||
| Short-term operating lease liabilities | ||||||||
| Accrued expenses | ||||||||
| Taxes payable | ||||||||
| Other current liabilities | ||||||||
| Warrant liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-current liabilities | ||||||||
| Asset retirement obligations | ||||||||
| Warrant liabilities | ||||||||
| Long-term operating lease liabilities | ||||||||
| Provision for post-employment benefits | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | $ | $ | ||||||
| Commitments and contingencies (Note 12) | ||||||||
| Shareholders’ equity | ||||||||
| Preferred shares (par value $; shares authorized, shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively) | ||||||||
| Ordinary shares (par value $; shares authorized, and shares issued and outstanding as of June 30, 2026 and December 31, 2025) | $ | $ | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-1 |
INDONESIA ENERGY CORPORATION LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Six
months ended | Six
months ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Revenue | $ | $ | ||||||
| Operating costs and expenses: | ||||||||
| Lease operating expenses | ||||||||
| Depreciation, depletion and amortization | ||||||||
| General and administrative expenses | ||||||||
| Total operating costs and expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Change in fair value of warrants | ( | ) | ||||||
| Allowance on other receivables | ( | ) | ( | ) | ||||
| Exchange gain (loss) | ( | ) | ||||||
| Other income, net | ||||||||
| Total other expenses, net | ( | ) | ( | ) | ||||
| Loss before income tax | ( | ) | ( | ) | ||||
| Income tax provision | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Comprehensive loss: | ||||||||
| Net loss | ( | ) | ( | ) | ||||
| Actuarial gain for post-employment benefits | ||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| Loss per ordinary share attributable to the Company | ||||||||
| Basic and diluted | $ | ) | $ | ) | ||||
| Weighted average number of ordinary shares outstanding | ||||||||
| Basic and diluted | ||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-2 |
INDONESIA ENERGY CORPORATION LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2026
(UNAUDITED)
Ordinary Shares, $0.00266667 Par Value | Additional | Accumulated Other | ||||||||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Accumulated Deficit | Comprehensive Income | Total Equity | |||||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Share Based Compensation | - | |||||||||||||||||||||||
| Issuance of ordinary shares by ATM offering | ||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
INDONESIA ENERGY CORPORATION LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2025
(UNAUDITED)
Ordinary Shares, $0.00266667 Par Value | Additional | Accumulated Other | ||||||||||||||||||||||
| Number of Shares | Amount | Paid-in Capital | Accumulated Deficit | Comprehensive Income | Total Equity | |||||||||||||||||||
| Balance as of January 1, 2025 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Issuance of ordinary shares by ATM offering | ||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-3 |
INDONESIA ENERGY CORPORATION LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net cash used in operating activities | $ | ( | ) | $ | ( | ) | ||
| Cash flows from investing activities | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Net cash provided by financing activities | ||||||||
| Net change in cash and cash equivalents, and restricted cash | ||||||||
| Cash and cash equivalents, and restricted cash at beginning of period | ||||||||
| Cash and cash equivalents, and restricted cash at end of period | $ | $ | ||||||
| Non-cash transactions | ||||||||
| Right-of-use assets acquired under operating leases in exchange for operating liabilities | $ | $ | ||||||
Reconciliation of cash and restricted cash to the consolidated balance sheets
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Cash | $ | $ | ||||||
| Restricted cash - non-current | ||||||||
| Total Cash and Restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
| F-4 |
INDONESIA ENERGY CORPORATION LIMITED
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 – ORGANIZATION AND PRINCIPAL ACTIVITIES
Indonesia
Energy Corporation Limited (the “Company,” “IEC,” “we,” “us,” our” and similar
terminology), through its subsidiaries in Hong Kong and Indonesia, is an oil and gas exploration and production company focused on the
Indonesian market. The Company currently holds two oil and gas assets through its subsidiaries in Indonesia: one producing block (the
“Kruh Block”) and one exploration block (the “Citarum Block”). The Company also identified a potential third
exploration block known as the “Rangkas Area.” In January 2024, new 3D seismic exploratory operations at the Company’s
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and consolidation
The unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial statements. Accordingly, they may not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The interim financial information should be read in conjunction with the consolidated financial statements and footnotes in the Company’s financial statements for the fiscal year ended December 31, 2025 included in the Company’s Form 20-F filed with the SEC on April 29, 2026 (“2025 Annual Report”). There have been no changes to the Company’s significant accounting policies as disclosed in Note 2 to the consolidated financial statements included in the Company’s 2025 Annual Report.
In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present a fair presentation of the Company’s condensed consolidated balance sheet as of June 30, 2026, condensed consolidated statements of operations, changes in equity and cash flows for the six months ended June 30, 2026 and 2025, as applicable, have been made. Operating results for the six months ended June 30, 2026 are not necessarily indicative of the operating results that may be expected for the fiscal year ending December 31, 2026 or any future periods.
The unaudited condensed consolidated financial statements include the financial statements of the Company and all its majority-owned subsidiaries from the dates they were acquired or incorporated. All intercompany balances and transactions have been eliminated in consolidation.
Recently accounting pronouncement adopted
In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The amendments address more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for public business entities for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted. The Company has adopted this ASU for the annual reporting period of the fiscal year beginning January 1, 2025, and the adoption was applied on a prospective basis, which did not have a material impact on the condensed consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company has adopted this ASU and elected the practical expedient for the annual reporting period of the fiscal year beginning January 1, 2026, and the adoption was applied on a prospective basis. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
| F-5 |
Recently issued accounting standards which have not yet been adopted
In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses”, which requires companies to provide new financial statement disclosures disaggregating prescribed expense categories within relevant income statement expense captions. This amendment is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, on a prospective basis and early adoption and retrospective application is permitted. The Company is currently assessing the impact of adopting this standard on the consolidated financial statements.
In January 2025, the FASB issued ASU 2025-01, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures.” The amendment in ASU 2025-01 amends the effective date of ASC 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows.
In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements. The standard clarifies disclosure requirements for interim financial statements and is effective for interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). ASU 2025-12 addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-12.
Other accounting pronouncements that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s condensed consolidated financial statements upon adoption.
Warrant Liabilities
The Company accounts for the warrants issued in connection with its January 2022 convertible note financing (see Note 6) in accordance with the guidance contained in Accounting Standards Codification (“ASC”) 815-40 Derivatives and Hedging - Contracts in Entity’s Own Equity (“ASC 815”) under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, the Company classifies such warrants as liabilities at their fair value and adjusts the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the condensed consolidated statements of operations. Such warrants are valued using the Black-Scholes option-pricing model as no observable traded price was available for such warrants. See Note 6 for further information.
| F-6 |
Fair Value of Financial Instruments
The Company records certain of its financial assets and liabilities at fair value on a recurring basis. Fair value is considered to be the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The three levels of inputs may be used to measure fair value include:
| Level 1 | applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. |
| Level 2 | applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
| Level 3 | applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |
The carrying values of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, other current assets, accounts payables, other current liabilities, accrued expenses and tax payables, approximate their fair values due to the short-term nature of these instruments.
Basic net loss per share is determined by dividing net loss by the weighted average number of the Company’s ordinary shares, par value $ per share (the “Ordinary Shares”), outstanding during the period, without consideration of potentially dilutive securities, except for those Ordinary Shares that are issuable for little or no cash consideration. Diluted net loss per share is determined by dividing net loss by diluted weighted average Ordinary Shares outstanding. Diluted weighted average shares reflect the dilutive effect, if any, of potentially dilutive Ordinary Shares, such as stock options and warrants calculated using the “treasury stock” and/or “if converted” methods, as applicable. In periods with reported net operating losses, all potential dilutive securities are generally deemed anti-dilutive such that basic net loss per share and diluted net loss per share are equal.
| F-7 |
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Warrants issued to L1 Capital (Note 6) | ||||||||
| Share options granted to the executive management | ||||||||
| Total | ||||||||
NOTE 3 – GOING CONCERN
The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations.
As
reflected in the Company’s unaudited condensed consolidated financial statements, the Company has incurred a net loss of $
The Company has financed the operations primarily through cash flow and proceeds from equity instrument financing (including the at-the-market offering, or ATM), where necessary.
Since March 2024, the Company has progressively registered and amended its securities offerings to facilitate capital raising through its At-the-Market Agreement, dated July 22, 2022, as amended on March 22, 2024 (“ATM Agreement”):
| ● | On
March 22, 2024, the Company filed a new shelf registration statement on Form F-3 (the “New F-3 Registration Statement”,
File No. 333-278175), which was declared effective on May 31, 2024. This covered a $ | |
| ● | The
Company has subsequently filed four supplements to increase its ATM offering limits on December 18, 2024, June 17, 2025, February
5, 2026 and April 27, 2026, respectively, in which the Company registered additional $ |
For
the six months ended June 30, 2026, the Company has received aggregate gross proceeds of approximately $
As
of September 22, 2026, the Company had approximately $
If the Company fails to achieve these goals, the Company will likely need additional financing to execute its business plan. If additional financing is required, the Company may seek to raise capital through its ATM program. However, the Company may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all, as we may elect not to utilize the ATM facility due to unfavorable market prices or find that such funds are otherwise unavailable when needed.
In the event that financing sources are not available from any source, or that the Company is unsuccessful in increasing its gross profit margin and reducing operating losses, the Company may be unable to implement its current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the Company’s business, prospects, financial condition and results of operations.
The Company has prepared its unaudited condensed consolidated financial statements on a going concern basis. However, there can be no assurance that the measures above can be achieved as planned. Based on management’s evaluation of the conditions existing as of June 30, 2026, together with the financing through ATM program, management has concluded that the Company does not have sufficient liquidity for at least one year from the date of the unaudited condensed consolidated statements to be issued. Therefore, the Company determined that the substantial doubt about the Company’s ability to continue as a going concern has not been alleviated. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to continue as a going concern, it may have to liquidate or otherwise dispose of its assets, and the amounts realized upon such liquidation or disposition may be less than the carrying amounts of such assets reflected in the unaudited condensed consolidated financial statements.
NOTE 4 – PREPAYMENT AND OTHER ASSETS
| June 30, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| VAT receivable – current | $ | $ | ||||||
| Other receivables | ||||||||
| Other receivables from well equipment - current | ||||||||
| Consumables and spare parts | ||||||||
| Prepaid expenses | ||||||||
| Total prepayment and other current assets | ||||||||
| Less: Allowance on other receivables | ( | ) | ( | ) | ||||
| Prepayment and other current assets, net | $ | $ | ||||||
| VAT receivable – non-current | $ | $ | ||||||
| Deposit and others | ||||||||
| Durable spare parts | ||||||||
| Total other assets – non - current | ||||||||
| Less: allowance on other receivables | ( | ) | ( | ) | ||||
| Other non-current assets, net | $ | $ | ||||||
For
the year ended December 31, 2023, the Company sold certain rig equipment to a third party, PT Andam Resorsis Nusantara. For the year
ended December 31, 2024, the Company recorded $
The
Value-Added Tax (“VAT”) receivable is the qualified input VAT paid by the Company to Pertamina. Entities that are VAT general
taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. As the Company’s sales
are not subject to any VAT output, the Company will bill Pertamina for reimbursement per tax reimbursement filing. The Company started
to record the VAT receivable since 2022 and started to collect the VAT receivable in 2024. In 2025 and 2026, the Company didn’t
collect any VAT receivable from Pertamina. As no collections have been received from Pertamina and the timing of collection cannot be
reliably estimated, the remaining balance of the VAT receivable has been classified as a non-current asset, with an allowance recorded
against the outstanding balance. The Company applied allowance for VAT receivable to $
After
evaluating above facts, $
| F-8 |
NOTE 5 – OIL AND GAS PROPERTY, NET
The following tables summarize the Company’s oil and gas activities by classification.
June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Oil and gas property - subject to amortization | $ | $ | ||||||
| Accumulated depletion | ( | ) | ( | ) | ||||
| Accumulated impairment | ( | ) | ( | ) | ||||
| Oil and gas property - subject to amortization, net | $ | $ | ||||||
| Oil and gas property - not subject to amortization | $ | $ | ||||||
| Accumulated impairment | ||||||||
| Oil and gas property - not subject to amortization | $ | $ | ||||||
The following shows the movement of the oil and gas property - subject to amortization balance.
Oil & Gas Property – Kruh | ||||
| December 31, 2025 | $ | |||
| Additional capitalization | ||||
| Depletion | ( | ) | ||
| June 30, 2026 (Unaudited) | $ | |||
For
the six months ended June 30, 2026, the Company incurred aggregated development costs, which were capitalized in the amount of $
The following shows the movement of ARO:
| Asset retirement obligation | ||||
| December 31, 2025 | $ | 724,572 | ||
| Payment | (38,137 | ) | ||
| June 30, 2026 (Unaudited) | $ | 686,435 | ||
Depletion
recorded for production on properties subject to amortization for the six months ended June 30, 2026 and 2025, were $
Furthermore, for the six months ended June 30, 2026 and 2025, the Company did not record any impairment of its oil and gas property subject to amortization based on the results of the ceiling tests performed, which indicated that the present value of estimated future net revenues generated by the oil and gas property exceeded the carrying balances. There was no impairment recorded for oil and gas property not subject to amortization.
| F-9 |
NOTE 6 – FINANCIAL LIABILITY
June 30, 2026 | December 31, 2025 | |||||||
| (Unaudited) | (Audited) | |||||||
| Warrant liabilities, net of debt issuance costs | $ | $ | ||||||
On
January 21, 2022 (the “Initial Closing Date”), the Company closed an initial $
Beginning
120 days after the Initial Closing Date, the Company was required to commence monthly installment payments of the Note through maturity
(or 14 payments) (“Monthly Payments”), which Monthly Payments could be made, at the Company’s election, in cash or
Ordinary Shares (or a combination of cash and Ordinary Shares), with such Ordinary Shares being issued at a valuation equal to the lesser
of: (i) $
| F-10 |
On
March 4, 2022, the Company and L1 Capital entered into a First Amendment to the Purchase Agreement and an Amended and Restated Senior
Convertible Promissory Note (the “Amended Note”) pursuant to which, among other items, Second Tranche Amount was increased
from $
On May 16, 2022, the Company and L1 Capital entered into a Second Amended and Restated Senior Convertible Promissory Note which amends and restates the Amended Note in its entirety (the “Second Amended Note” and collectively with the Note and the Amended Note, the “Notes”). Among other matters, the Second Amended Note provided for an accelerated funding of the Second Tranche Amount, which was funded to the Company on May 23, 2022, at which time the Second Warrant was issued to L1 Capital.
Accounting for warrants
The
Warrants were issued in conjunction with the convertible note by a separate contract, and legally detachable and separately transferrable.
The Warrants were exercisable via “cashless” exercise if there is not an effective registration statement covering resale
of the Ordinary Shares under the Warrants. The exercise price per Ordinary Share under the Warrants was $
The
Company recognized $
The Company utilizes the Black-Scholes option-pricing model to estimate the fair value of the Warrants at each reporting period since the Warrants are not actively traded. The estimated fair value of the Warrant liabilities is determined using Level 3 inputs in accordance with ASC 820, “Fair Value Measurement”. Inherent in the Black-Scholes model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its Ordinary Shares based on historical volatility of its own stock price during the period that matches the expected remaining life of the Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the Warrants. The expected life of the Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates remaining at zero.
The following reflects the inputs and assumptions used:
| January 24, 2022 | May 23, 2022 | December 31, 2022 | December 31, 2023 | December 31, 2024 | December 31, 2025 | June 30, 2026 | ||||||||||||||||||||||
| Exercise price | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Share price | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Expected term from grant date (in years) | ||||||||||||||||||||||||||||
| Expected volatility | % | % | % | % | ||||||||||||||||||||||||
| Risk-free interest rate | % | % | % | % | % | % | ||||||||||||||||||||||
| Dividend yield (per share) | ||||||||||||||||||||||||||||
During
the year ended December 31, 2022, L1 Capital exercised the Initial Warrant for at $
| F-11 |
The movement of warrant liabilities is summarized as follows:
| Balance as of January 1, 2022 | $ | |||
| Issuance of Initial Warrant as of January 24, 2022 | ||||
| Issuance of Second Warrant as of May 23, 2022 | ||||
| warrant shares exercised on June 16, 2022 | ( | ) | ||
| warrant shares exercised on August 18, 2022 | ( | ) | ||
| warrant shares exercised on August 29, 2022 | ( | ) | ||
| Change in fair value of warrant liabilities | ( | ) | ||
| Balance as of December 31, 2022 | $ | |||
| Change in fair value of warrant liabilities for the year | ( | ) | ||
| Balance as of December 31, 2023 | $ | |||
| Change in fair value of warrant liabilities | ||||
| Balance as of December 31, 2024 | $ | |||
| Change in fair value of warrant liabilities | ( | ) | ||
| Balance as of December 31, 2025 | $ | |||
| Change in fair value of warrant liabilities | ( | ) | ||
| Balance as of June 30, 2026 |
NOTE 7 – OPERATING LEASES
The Company accounts for leases in accordance with ASC Topic 842, Leases (“ASC 842”). All contracts are evaluated to determine whether or not they represent a lease. A lease conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company has operating leases primarily consisting of facilities with remaining lease terms of one year to three years. The lease term represents the period up to the early termination date unless it is reasonably certain that the Company will not exercise the early termination option.
Leases are classified as finance or operating in accordance with the guidance in ASC 842. The Company did not hold any finance leases as of June 30, 2026 and December 31, 2025.
The Company also has certain short-term leases related to equipment and tools. A short-term lease is a lease with a term of 12 months or less and does not include the option to purchase the underlying asset that the Company would expect to exercise. The Company has elected to adopt the short-term lease exemption in ASC 842 and as such has not recognized a “right of use” asset or lease liability for these short-term leases.
The
Company’s lease agreements do not specify an implicit borrowing rate, and generally, the lease discounted rate is set at a collateralized
basis for a similar term of incremental borrowing rate as the underlying lease. However, as of June 30, 2026, the Company has not obtained
borrowings from financial institutions for a number of years, making the use of a standalone incremental borrowing rate
inappropriate to the new lease agreement.
The components of lease expense were as follows for each of the periods presented:
| June 30, 2026 | June 30, 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Operating lease expense | $ | $ | ||||||
| Short-term lease expense | ||||||||
| Total operating lease costs | $ | $ | ||||||
| Other information | ||||||||
| Operating cash flows used in operating leases | ||||||||
| Weighted average remaining lease term (in years) | ||||||||
| Weighted average discount rate | % | % | ||||||
Future lease payments included in the measurement of operating lease liabilities as of June 30, 2026 were as follows:
| June 30, 2026 | ||||
| The remainder of 2026 | $ | |||
| 2027 | ||||
| Total lease liabilities | ||||
| Less: discount on operating lease liabilities | ( | ) | ||
| Present value of operating lease liabilities | ||||
| Less: Current portion of operating lease liabilities | ( | ) | ||
| Non-current portion of operating lease liabilities | $ | |||
| F-12 |
NOTE 8 – TAXES
The current and deferred components of the income tax provision are substantially attributable to the Company’s subsidiaries in Indonesia. Due to the unrecovered expenditure on the Company’s Kruh Block operations, there was provision for income taxes for the six months ended June 30, 2026 and 2025, respectively.
The
effective tax rate is based on expected income and statutory tax rates. For interim financial reporting, the Company estimates the annual
tax rate based on projected taxable income for the full year and records an interim income tax provision in accordance with guidance
on accounting for income taxes in an interim period. As the year progresses, the Company refines the estimates of the year’s taxable
income as new information becomes available. The Company’s effective tax rates for the six months ended June 30, 2026 and 2025
were
The Company did not incur any interest and penalties related to potential underpaid income tax expenses.
NOTE 9 – EQUITY
As
of June 30, 2026 and December 31, 2025, there were and Ordinary Shares issued and outstanding. The change in outstanding
Ordinary Shares was due to the issuance of Ordinary Shares under the ATM offering. For the six months ended June 30, 2026, there were
Ordinary Shares sold and issued through the ATM offering, and the Company received net proceeds of approximately $
On December 29, 2025, pursuant to the fourth amendment to the employment agreement of the Company’s President, Frank Ingriselli, the Company granted Mr. Ingriselli Ordinary Shares which vested on July 1, 2026. Such Ordinary Shares were valued at $ per share which is based on the closing price of the shares traded on NYSE American Exchange on December 29, 2025. The Company recorded $ share based compensation expenses as of June 30, 2026.
NOTE 11 – RELATED PARTY TRANSACTIONS
The following is a list of the major related parties and the relationship with the Company as of June 30, 2026 and 2025:
| Name of the related parties | Relation with the Company | |
| Maderic Holding Limited | ||
| HFO Investment Group Ltd | ||
| Dr. Wirawan Jusuf | ||
| Frank C. Ingriselli | ||
| Chia Hsin “Charlie” Wu | ||
| Mirza F. Said | ||
| James J. Huang | ||
| Gregory L. Overholtzer | ||
| Chiu Chen-Chia | ||
| Chiu Chen-Ta | ||
| PT. Wiranusa Karana Mardika |
| F-13 |
The Company’s related party, PT. Wirannusa Karana Mardika (PT WKM) provides office space for Kerja Sama Operasi/Joint Operation with Pertamina (KSO), PT Cogen Nusantara Energi (CNE), PT Harvel Nusantara Energi (HNE) and PT Hutama Wiranusa Energi (HWE). KSO related expenses are recorded under lease operating expense and rental related to other related parties are recorded under general and administrative expenses. The related party rental expenses for the six months ended June 30, 2026 and 2025 were as follows:
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| General and administrative expense | $ | $ | ||||||
| Leasing operating expense | ||||||||
| Total | $ | $ | ||||||
As of June 30, 2026 and December 31, 2025, the amount due to related parties of the Company was listed as below:
| June 30, | December 31, | |||||||
| Amount due to related parties | 2026 | 2025 | ||||||
| (Unaudited) | (Audited) | |||||||
| PT. Wiranusa Karana Mardika | $ | $ | ||||||
| Total | $ | $ | ||||||
Since
January 1, 2023, the Company leased Giesmart Plaza Zone 2 and Zone 1, 3&4 for KSO and combined office space for CNE, HNE and HWE,
respectively, from PT WKM. PT WKM is owned by the Company’s CEO, Dr. Wirawan Jusuf, who holds
NOTE 12 – COMMITMENTS AND CONTINGENCIES
Litigation
From time to time, the Company may be subject to routine litigation, claims, or disputes in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention. The Company defends itself vigorously in all such matters. In the opinion of management, no pending or known threatened claims, actions or proceedings against the Company are expected to have a material adverse effect on its financial position, results of operations or cash flows. However, the Company cannot predict with certainty the outcome or effect of any such litigation or investigatory matters or any other pending litigation or claims. There can be no assurance as to the ultimate outcome of any such lawsuits and investigations. The Company had no significant pending litigation as of June 30, 2026 and December 31, 2025.
Commitments
As a requirement to acquire and maintain the operatorship of oil and gas blocks in Indonesia, the Company follows a work program and budget that includes firm capital commitments.
Currently, Kruh Block is operated under a KSO until May 2030, which was extended to September, 2035 in August 2023. The Company has material commitments related to its development and exploration activities in the Kruh Block and material commitments in regard to the exploration activity in the Citarum Block under a Production Sharing Contract with the Indonesian Special Task Force for Upstream Oil and Gas Business Activities (known as SKK Migas) (the “PSC”). The following table summarizes future commitments amounts on an undiscounted basis as of June 30, 2026 for all the planned expenditures to be carried out in Kruh Block and Citarum Block (this table takes into account the Company’s updated drilling plans for Kruh Block):
| F-14 |
| Future commitments (Unaudited) | |||||||||||||||
| Nature of commitments | Remainder of 2026 | 2027 | 2028 and beyond | ||||||||||||
| Citarum Block PSC | |||||||||||||||
| Geological and geophysical (G&G) studies | (a) | $ | $ | $ | |||||||||||
| 2D seismic | (a) | ||||||||||||||
| 3D seismic | (a) | ||||||||||||||
| Drilling | (b)(c) | ||||||||||||||
| Total commitments - Citarum PSC | $ | $ | $ | ||||||||||||
| Kruh Block KSO | |||||||||||||||
| Operating commitments | (d) | $ | $ | $ | |||||||||||
| Production facility | |||||||||||||||
| G&G studies | (a) | ||||||||||||||
| 2D seismic | |||||||||||||||
| 3D seismic | |||||||||||||||
| Drilling | (a) | ||||||||||||||
| Workover | |||||||||||||||
| Certification | |||||||||||||||
| Abandonment and Site Restoration | (c) | ||||||||||||||
| Total commitments - Kruh KSO | $ | $ | $ | ||||||||||||
| Total Commitments | $ | $ | $ | ||||||||||||
Nature of commitments:
| (a) | ||
| (b) | ||
| (c) | ||
| (d) |
| F-15 |
NOTE 13 – SEGMENT REPORTING
The Company uses the “management approach” in determining reportable segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (CODM) for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company.
The Company manages its business as a single operating segment engaged in upstream oil and gas industry in Indonesia. Substantially all of its revenues are derived in Indonesia. All long-lived assets are located in Indonesia. Therefore, no geographical segments are presented.
The Company has provided this segment information for all comparable prior periods. Segment information is summarized as follows:
June 30, 2026 | June 30, 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Oil and gas revenues | $ | $ | ||||||
| Lease operating expense | ( | ) | ( | ) | ||||
| Depletion, depreciation, and amortization | ( | ) | ( | ) | ||||
| General and administrative expenses | ( | ) | ( | ) | ||||
| Total other expense, net | ( | ) | ( | ) | ||||
| Result of oil and gas producing operations before income taxes | $ | ( | ) | $ | ( | ) | ||
| Segment net loss | $ | ( | ) | $ | ( | ) | ||
| Reconciliation of profit or loss | ||||||||
| Adjustment and reconciling items | ||||||||
| Consolidated net loss | $ | ( | ) | $ | ( | ) | ||
NOTE 14 – SUBSEQUENT EVENTS
The Company evaluated all events up to the date of the issuance of the report and determined that below events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.
On July 1, 2026, the 30,000 Ordinary Shares granted to the Company's President on December 29, 2025 vested.
On July 25, 2026, the Company
spudded the K-29 well at the Kruh Block. The well reached a total measured depth of approximately
| F-16 |
EXHIBIT 99.2
INDONESIA ENERGY CORPORATION LIMITED
OPERATING AND FINANCIAL REVIEW
FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2026 AND 2025
The following discussion of the results of our operations and our financial condition should be read in conjunction with the unaudited condensed consolidated financial statements included as Exhibit 99.1 to this report. This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth in “Item 3. Key Information–D. Risk Factors” set forth in our Form 20-F filed with the SEC on April 29, 2026.
Business Overview
Indonesia Energy Corporation Limited (“IEC,” “the Company,” or “we,” “our,” “us” and similar terminology) is an oil and gas exploration and production company focused on the Indonesian market. Alongside operational excellence, we believe we have set the highest standards for ethics, safety and corporate social responsibility practices to ensure that we add value to society. Led by a professional management team with extensive oil and gas experience, we seek to bring forth at all times the best of our expertise to ensure the sustainable development of a profitable and integrated energy exploration and production business model.
We currently have rights through contracts with the Indonesian government to one oil and gas producing block (“Kruh Block”) and one oil and gas exploration block (“Citarum Block”). We have also identified a potential third exploration block, known as the Rangkas Area, and we may seek to acquire or otherwise obtain rights to additional oil and gas producing assets. In January 2024, new 3D seismic operations at the Company’s 63,778 acre Kruh Block commenced, which was completed in June, 2024. Interpretation and reservoir study based on the 3D seismic data continued until September 2025. Importantly, we anticipate that the results of this seismic work will support the commencement of our continuing drilling program, which includes two back-to-back wells for which field operations are already underway. The first well, K-29, was spudded on July 25, 2026, and drilling operations commenced on the same date. The well reached a total measured depth of approximately 3,378 feet, and drilling operations were completed in August 2026. The actual production operations at K-29 are expected to commence in late September 2026. Following the completion of the K-29 well, the Company plans to commence drilling activities at the WK-5 as part of the drilling program. The second well, WK-5, is expected to be completed by the end of 2026, and the drilling rig used at the K-29 well has been mobilized and is on its way to the WK-5 wellsite. The Company also plans to conduct a continuous drilling program from 2027 through 2030 in the Kruh, West Kruh and North Kruh fields over the next four years to maximize production, during which it expects to drill 16 new wells, subject to the availability of capital and other financing, regulatory approvals and permits, the availability of drilling equipment and services, market conditions, and other factors beyond the Company’s control. The timing and number of wells ultimately drilled may differ materially from the Company’s current plans.
We produce oil through PT Green World Nusantara (“Green World”), our indirect wholly-owned subsidiary, which operates the Kruh Block under an agreement with PT Pertamina EP (Persero), the Indonesian state-owned oil and gas company (“Pertamina”). Our operatorship Kruh Block previously ran until May 2030 under a ten-year Joint Operation Partnership (the “KSO”) with Pertamina. Kruh Block covers an area of 258.1 km2 (63,778 acres) and is located onshore 16 miles northwest of Pendopo, Pali, South Sumatra. In December 2022, we started our negotiations with Pertamina for a five-year extension of our contract for Kruh Block. Effective August 9, 2023, Green World and Pertamina executed an amendment to the KSO (the “Amended KSO”) that moved the expiration date of our operatorship of Kruh Block to September 2035. This extension effectively gives us 13 years to fully develop the existing 3 oil fields, and 5 other undeveloped oil and gas bearing structures at Kruh Block. Further, the Amended KSO increases our after-tax profit split from the current 15% to 35%, for an increase of more than 100%. We received Pertamina’s signature to the Amended KSO in early September 2023.
Citarum Block is an exploration block initially covering an area of 3,924.67 km2 (969,807 acres). On April 18, 2024, the Indonesian Special Task Force for Upstream Oil and Gas Business Activities (“SKK Migas”) approved the relinquishment of 1,378.78 Km2 block area, with remaining block area of 2,545.89 km2. In July 2024, SKK Migas approved the second relinquishment granting final retention of 784.88 km2 (193,948 acres) until 2048. This block is located onshore in West Java and only 16 miles south of the capital city of Indonesia, Jakarta. Our rights to Citarum Block run until July 2048 under Production Sharing Contract (“PSC”) agreement with SKK Migas.
In August 2025, we signed a memorandum of understanding with Aguila Energia e Participações Ltda. (“AEP”), an affiliate of Rio de Janeiro–based investment firm Aguila Capital, led by energy executive Blener Mayhew. The memorandum of understanding establishes a cooperative framework between the parties to jointly identify, evaluate, and pursue potential opportunities to acquire or participate in oil and gas or other energy-related assets and projects located in Brazil. The cooperation combines our oil and gas and capital market experience with AEP’s capabilities in local Brazilian transactions, regulatory engagement, and asset development. The memorandum of understanding reflects our and AEP’s shared vision to build a diversified energy portfolio across upstream and downstream segments through disciplined, cross-border cooperation. The memorandum of understanding is a non-binding statement of intent. Our company and AEP will seek to enter into appropriate definitive agreements for projects on an opportunity-by-opportunity basis. We believe there are several promising reasons for our company to consider Brazil as the first jurisdiction beyond Indonesia to explore oil and gas opportunities including (i) Brazil’s Oferta Permanente bid system which allows for year-round acquisition opportunities of relinquished and new exploration and production blocks, (ii) our understanding that many junior operators in Brazil are divesting producing and near-producing fields at attractive valuations due to capital constraints, creating opportunities for relatively near term brownfield optimization and predictable cash flow profiles and (iii) under concession contracts with the Brazilian government, royalties typically range from 5–10% (with reductions possible for mature or marginal fields), offering the potential for higher after-tax cash flows compared to production-sharing contracts, as well as the potential for enhanced operational flexibility and internal rates of return.
Overview of Results of Operations
Our key financial and operating highlights for the six months ended June 30, 2026 were :
| ● | Total oil production by IEC for the six months ended June 30, 2026 was 24,869 barrels (“Bbl”), an increase of 4,756 Bbl for the same period in 2025, which resulted in higher cost recovery entitlements and revenue for the six months ended June 30, 2026 compared to the same period in 2025. This increase was primarily due to successful stimulation treatments in our K-26 well, thereby improving the flow characteristics of the oil within the reservoir and facilitating its movement toward the wellbore. | |
| ● | The Indonesian Crude Price (“ICP”) increased approximately 26.77% from an average price of $67.91 per Bbl for the six months ended June 30, 2025 to $86.09 per Bbl for the same period in 2026, resulting in the corresponding increase in our revenue and cost recovery entitlements. |
| ● | The average production cost per Bbl for the six months ended June 30, 2026 was $40.64 compared to $49.46 for same period in 2025. The lower production cost per Bbl in 2026 was primarily due to an increase in oil production resulting from successful stimulation treatments in K-26. |
| ● | Kruh Block: with respect to our currently producing Kruh Block, our KSO contract commenced in May 2020 for production in the Kruh Block until 2030 and in August 2023, this has been amended to extend the contract term by 5 years to September 2035. We received government approval on our drilling, workover, G&G study and seismic program for Kruh Block. The last drilling of K-28 well was spudded on June 22, 2022. Final well testing was completed in late 2024. From January to June 2024, we completed a three-dimensional seismic acquisition program. The newly acquired high quality seismic data has been processed and interpreted, and will be used for the planning of next drilling program. The first well, K-29, was spudded on July 25, 2026, and drilling operations commenced on the same date. The well reached a total measured depth of approximately 3,378 feet, and drilling operations were completed in August 2026. The actual production operations at K-29 are expected to commence in late September 2026. Following the completion of the K-29 well, the Company plans to commence drilling activities at the WK-5 as part of the drilling program. The second well, WK-5, is expected to be completed by the end of 2026. The Company also plans to conduct a continuous drilling program from 2027 through 2030 in the Kruh, West Kruh and North Kruh fields over the next four years to maximize production, during which it expects to drill 16 new wells, subject to the availability of capital and other financing, regulatory approvals and permits, the availability of drilling equipment and services, market conditions, and other factors beyond the Company’s control. The timing and number of wells ultimately drilled may differ materially from the Company’s current plans. | |
| ● | Citarum Block: with respect to Citarum Block, we have designed a 2D seismic program, and a delineation drilling program, subject to the availability of funding necessary to conduct such activity. Following comprehensive geological and geophysical assessments of the Citarum Block, we have elected to retain 2,545.89 km², after relinquishing 1,378.78 km² from the original 3,924.67 km² (969,807 acres). In July 2024, SKK Migas approved the second relinquishment granting final retention of 784.88 km2 (193,948 acres) until 2048. Our focus remains on assessing and ranking petroleum projects within the block as we prepare for the next phase of drilling and seismic operations. We are currently designing a drilling program to drill the first well, Jatayu-2, to delineate the gas discovery in the Jatayu area. |
| 2 |
Update to Kruh Block Drilling Program
As part of the original 18 wells drilling program, two wells were drilled in 2021 and two wells were drilled in 2022, for a total of four wells. We previously planned to complete the rest of 14 wells after the interpretation of the newly acquired three-dimensional seismic data is completed. Following the completion of seismic acquisition, processing and interpretation in 2024 and 2025, we identified four additional drilling locations and incorporated them into its drilling program. We plan to drill four new wells at these locations. The first well, K-29, was spudded on July 25, 2026, and drilling operations commenced on the same date. The well reached a total measured depth of approximately 3,378 feet, and drilling operations were completed in August 2026. We therefore modified our drilling plan for Kruh Block with an anticipation to drill one more well in 2026. The remaining planned 16 wells will be drilled between 2027 and 2030, depending on the availability of funding necessary to conduct such activity.
With the amended KSO contract providing higher profit share and extension of five years production period effective in August 2023, besides the completion of drilling 14 remaining wells, additional drilling program would maximize the net cash flow and net present value of Kruh field development. With the completion of a high quality 3D seismic program in the Kruh Block in June 2024, additional drilling locations have been identified. We anticipate that the results of this seismic work will support the commencement of our continuing drilling program, which includes two back-to-back wells. The first well, K-29, was spudded on July 25, 2026, and drilling operations commenced on the same date. The well reached a total measured depth of approximately 3,378 feet, and drilling operations were completed in August 2026. The actual production operations at K-29 are expected to commence in late September 2026. Following the completion of the K-29 well, the Company plans to commence drilling activities at the WK-5 as part of the drilling program and the drilling rig used at the K-29 well has been mobilized and is on its way to the WK-5 wellsite. The WK-5 well, is expected to be completed by the end of 2026. We also plan to conduct a continuous drilling program from 2027 through 2030 in the Kruh, West Kruh and North Kruh fields over the next four years to maximize production, during which it expects to drill 16 new wells, subject to the availability of capital and other financing, regulatory approvals and permits, the availability of drilling equipment and services, market conditions, and other factors beyond the Company’s control. The timing and number of wells ultimately drilled may differ materially from the Company’s current plans.
Citarum Block Update
Citarum Block is an exploration block initially covering an area of 3,924.67 km2 (969,807 acres). On April 18, 2024, the SKK Migas approved the relinquishment of 1,378.78 Km2 block area, with remaining block area of 2,545.89 km2. In July 2024, SKK Migas approved the second relinquishment granting final retention of 784.88 km2 (193,948 acres) until 2048. Our rights to Citarum Block run until July 2048 under the PSC agreement with SKK Migas.
With respect to the Citarum Block, we have designed a 2D seismic program and a delineation drilling program, subject to the availability of funding necessary to conduct such activity. Our focus remains on assessing and ranking petroleum projects within the block as we prepare for the next phase of drilling and seismic operations. We are currently designing a drilling program to drill the first well, Jatayu-2, to delineate the gas discovery in the Jatayu area.
Results of Operations for the Six Months Ended June 30, 2026 and 2025
Revenue
Revenues increased by approximately $709,948 or 66.38%, to $1.78 million for the six months ended June 30, 2026 compared with the same period in 2025. The increase was primarily due to a significant rise in oil and gas production driven by successful stimulation treatments of existing production wells, as well as an increase in oil price. The oil production increased by approximately 4,756 Bbl or 23.64% for the six months ended June 30, 2026 compare to the same period in 2025. The ICP increased approximately 26.77% from an average price of $67.91 per Bbl for the six months ended June 30, 2025 to $86.09 per Bbl for the same period in 2026.
Lease operating expenses
Lease operating expenses decreased by approximately $91,957 or 6.60%, for the six months ended June 30, 2026 compared to the same period in 2025, mainly due to a slight decrease in field office administration expenses and production expenses.
Depreciation, depletion and amortization (DD&A)
DD&A increased by approximately $86,066, or 25.66%, for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a significant increase in depletion of oil and gas production.
| 3 |
General and Administrative Expenses
General and administrative expenses decreased by approximately $18,811, or 1.07%, to $1,742,249 for the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a decrease in office expenses and utilities, professional fees and travelling expenses.
Other expenses, net
We had other expenses, net of $196,217 for the six months ended June 30, 2026 as compared to other expenses of $403,460 for the same period in 2025. The net of other expenses for the six months ended June 30, 2026 was mainly due to the change in fair value of warrant liabilities and allowance on other receivables.
Net Loss
We had a net loss of $1,882,881 for the six months ended June 30, 2026 compared to $2,824,774 for the same period in 2025. The decrease in net loss was due to the combination of the factors discussed above.
Liquidity and Capital Resources
We generated a net loss of $1,882,881 and net cash used in operating activities of $2,090,111 for the six months ended June 30, 2026. In addition, we had an accumulated deficit of $52,909,664 and working capital of $6,604,181 as of June 30, 2026. Our operating results for future periods are subject to numerous risks and uncertainties and it is uncertain if we will be able to reduce or eliminate our net losses and achieve cash flow positive operations in the near term or eventually achieve profitability. If we are not able to increase revenues or manage operating expenses in line with revenue forecasts, or if the price of oil should drop significantly, we may not be able to achieve profitability.
Our principal sources of liquidity during the six months ended June 30, 2026 were proceeds from At The Market Offering Agreement we entered with H.C. Wainwright & Co., LLC (the “Sales Agent”) on July 22, 2022, as amended on March 22, 2024 (“ATM Agreement”). Pursuant to this ATM Agreement, we may offer and sell, from time to time, to or through the Sales Agent, ordinary shares having an aggregate gross offering price of up to $20,000,000. On March 22, 2024, the Company filed a new shelf registration statement on Form F-3 (the “New F-3 Registration Statement”, File No. 333-278175), which was declared effective on May 31, 2024. This covered a $9,600,000 base prospectus for various securities and a prospectus supplement for the sale of up to $4,267,622 of our ordinary shares under the ATM Agreement. We subsequently filed four supplements to increase its ATM offering limits on December 18, 2024, June 17, 2025, February 5, 2026 and April 27, 2026, respectively, in which we registered additional $3,850,000, $3,200,000, $7,900,000 and $14,100,000, respectively, worth of our ordinary shares. For the six months ended June 30, 2026, we received net proceeds of $2,252,287 through our utilization of such ATM offering program. As of the date of this Form 6-K Report, there was $14.1 million available for issuance under the ATM Agreement.
| 4 |
As of September 22, 2026, we had approximately $4.80 million of cash which is placed with financial institutions and is unrestricted as to withdrawal or use. We intend to mitigate the conditions of substantial doubt and meet the cash requirements for the next 12 months from the issuance date of this report by implementing management’s remedial plan, including a combination of improving operational efficiency, cost reductions and debt and equity financing. We plan to collect the receivables timely and arrange payment schedule in accordance with the cash management plan.
If we fail to achieve these goals, we will likely need additional financing to execute our business plan. If additional financing is required, we may seek to raise capital through our ATM program. However, we may not be able to obtain the necessary additional capital on a timely basis, on acceptable terms, or at all, as we may elect not to utilize the ATM facility due to unfavorable market prices or find that such funds are otherwise unavailable when needed.
In the event that financing sources are not available from any source, or that we are unsuccessful in increasing our gross profit margin and reducing operating losses, we may be unable to implement our current plans for expansion, repay debt obligations or respond to competitive pressures, any of which would have a material adverse effect on the our business, prospects, financial condition and results of operations.
We have prepared our unaudited condensed consolidated financial statements on a going concern basis. However, there can be no assurance that the measures above can be achieved as planned. Based on management’s evaluation of the conditions existing as of June 30, 2026, together with the financing through ATM program, management has concluded that we do not have sufficient liquidity for at least one year from the date of the unaudited condensed consolidated statements to be issued. Therefore, we determined that the substantial doubt about the our ability to continue as a going concern has not been alleviated. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. If we are unable to continue as a going concern, we may have to liquidate our assets or otherwise dispose of our assets, and the amounts realized upon such liquidation or disposition may be less than the carrying amounts of such assets reflected in the unaudited condensed consolidated financial statements.
Contractual Obligations
After taking into consideration our updating seismic and drilling plans for Kruh Block as described above under “Update to Kruh Block Drilling Program,” the following table summarizes future commitments amounts on an undiscounted basis as of June 30, 2026 for all the planned expenditures to be carried out at Kruh Block and Citarum Block:
| Future commitments | |||||||||||||||
| Nature of commitments | Remainder of 2026 | 2027 | 2028 and beyond | ||||||||||||
| Citarum Block PSC | |||||||||||||||
| Geological and geophysical (G&G) studies | (a) | $ | - | $ | - | $ | 950,000 | ||||||||
| 2D seismic | (a) | - | - | 6,050,000 | |||||||||||
| 3D seismic | (a) | - | - | 2,100,000 | |||||||||||
| Drilling | (b)(c) | - | - | 30,000,000 | |||||||||||
| Total commitments -Citarum PSC | $ | - | $ | - | $ | 39,100,000 | |||||||||
| Kruh Block KSO | |||||||||||||||
| Operating commitments | (d) | $ | 1,429,905 | $ | 3,763,035 | $ | 81,423,545 | ||||||||
| Production facility | - | 700,000 | 300,000 | ||||||||||||
| G&G studies | (a) | 100,000 | 50,000 | - | |||||||||||
| 2D seismic | - | - | - | ||||||||||||
| 3D seismic | - | - | - | ||||||||||||
| Drilling | (a) | 5,000,000 | 2,600,000 | 33,400,000 | |||||||||||
| Workover | - | - | - | ||||||||||||
| Certification | - | - | - | ||||||||||||
| Abandonment and Site Restoration | (c) | 38,136 | 76,272 | 610,179 | |||||||||||
| Total commitments -Kruh KSO | $ | 6,568,041 | $ | 7,189,307 | $ | 115,733,724 | |||||||||
| Total Commitments | $ | 6,568,041 | $ | 7,189,307 | $ | 154,833,724 | |||||||||
Nature of commitments:
| (a) | Both firm commitments and a 5-year work program according to our economic model are included in the estimate. Firm capital commitments represent legally binding obligations with respect to the KSO for Kruh Block or the PSC for Citarum Block in which the contract specifies the minimum exploration or development work to be performed by us within the first three years of the contract. In certain cases where we execute contracts requiring commitments to a work scope, those commitments have been included to the extent that the amounts and timing of payments can be reliably estimated. | |
| (b) | Includes one exploration and two delineation wells. | |
| (c) | Abandonment and site restoration are primarily upstream asset removal costs at the drilling completion of a field life related to or associated with site clearance, site restoration, and site remediation, based on Indonesian government rules. | |
| (d) | Operating commitments are primarily production operation costs related to or associated with the maintenance well work scheduled to be performed on the oil wells with respect to the Kruh Block KSO. |
| 5 |