REG - Curzon Energy plc - 2021 Interim Results
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.
Curzon Energy Plc
("Curzon" or the "Company")Unaudited Half-Year Results for the Six Months Ended 30 June 2021
13 September 2021
Curzon Energy Plc (LON:CZN) the London Stock Exchange listed company, announces its unaudited interim results for the six months to 30 June 2021.
CHAIRMAN'S STATEMENT
I am pleased to present the interim report for the Company, covering its results for the six months ended 30 June 2021.
Financial Review
The Company incurred a loss of US$411,907 in the period. A majority of this loss comprised expenditures in relation to the maintenance of a commercial position at its Coos Bay Energy LLC ("Coos Bay") coalbed methane ("CBM") project as well as corporate costs and overheads associated with the UK listing. Additional expenditures were incurred conducting due diligence on a potential transaction with Poseidon Enhanced Technologies ("PET").
The Company had cash of US$113,282 as at 30 June 2021 (US$146,549 as at 30 June 2020). Basic loss per share of US$ 0.003 (period ended 30 June 2020: US$ 0.004).
Given the nature of the business and its present development strategy, it is unlikely that the Board will recommend a dividend in the foreseeable future.
Outlook
The Company's near-term goal remains focused on exploring ongoing opportunities associated with the Company's historic Coos Bay coal bed methane project, as well as completing due diligence, covering a potential transaction with Poseidon Enhanced Technologies ("PET"). The Company believes that in light of a recent resurgence in US natural gas prices that the Company's historic assets continue to have value, and as such it progressing ongoing discussions regarding a farm-in or sale of these assets.
Due diligence efforts on the potential transaction with PET continue to progress, with PET preparing its operations, its team and its balance sheet for the planned transaction with Curzon.
On behalf of the Board, I would like to take this opportunity to thank our staff and advisers for their hard work as well as our shareholders for their continued support during this extended transition process.
We look forward to updating shareholders on our progress in due course.
John McGoldrick
Chairman and Non-Executive Director
CHIEF EXECUTIVE OFFICER'S REVIEW
The Company remains focused on exploring development opportunities regarding its Coos Bay coal bed methane project, including active renewal discussions regarding license extensions with the major lease owners.
Meanwhile, discussions and data sharing continue with PET, and as demonstrated by the recent extension announced on 1 September 2021, all sides remain engaged and working towards completing this key diligence stage, including preparations of PET to ultimately operate as a listed entity.
The Company remains convinced of the sizeable opportunity that a chemical plastics recycling business offers, particularly in meeting the needs of major European and international brands, which are soon to be required to include 100% recycled PET plastic in their products.
With measurable progress on the potential transaction with PET and increasing US gas prices opening up opportunities regarding a Coos Bay transaction, the Company is well positioned to enter the exciting ESG space meeting a key ongoing industry need for recycled plastics.
Scott Kaintz
Chief Executive Officer
STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE CONDENSED INTERIM REPORT AND CONDENSED FINANCIAL STATEMENTS
The Directors confirm that the condensed interim financial information has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and that the Interim Report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R, namely: an indication of important events that have occurred during the first six months and their impact on the condensed interim financial information, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and material related-party transactions in the first six months and any material changes in the related-party transactions described in the last Annual Report.
By order of the Board
John McGoldrick
Chairman and Non-Executive Director
Consolidated statement of comprehensive income
for the six months ended 30 June 2021
Notes
Six months ended
30 June 2021
Unaudited
US$Six months ended
30 June 2020
Unaudited
US$Year ended
31 December 2020
Audited
US$
Administrative expenses
5
(278,305)
(287,043)
(528,799)
Loss from operations
(278,305)
(287,043)
(528,799)
Finance expense
6
(67,847)
(76,470)
(88,775)
Impairment of exploration and evaluation assets
-
-
-
Foreign exchange differences
266
(3,487)
-
Loss before taxation
(345,886)
(367,000)
(617,574)
Income tax expense
-
-
-
Loss for the period attributable to equity holders of the parent company
(345,866)
(367,000)
(617,574)
Other comprehensive income/(expense)
Gain/(loss) on translation of parent net assets and results from functional currency into presentation currency
(66,041)
78,311
(82,297)
Total comprehensive loss for the period
(411,907)
(288,689)
(699,871)
(Loss) per share
Basic and diluted, US$
(0.003) (
(0.004)(
(0.008))
Consolidated statements of financial position
Notes
At 30 June 2021
Unaudited
US$At 30 June 2020
Unaudited
US$At 31 December 2020
Audited
US$
Assets
Non-current assets
Intangible assets
-
-
-
Property, plant and equipment
-
-
-
Restricted cash
125,000
125,000
125,000
Total non-current assets
125,000
125,000
125,000
Current assets
Prepayments and other receivables
32,180
33,812
41,699
Cash and cash equivalents
113,282
146,549
47,188
Total current assets
145,462
180,361
88,887
Total assets
270,462
305,361
213,887
Liabilities
Current liabilities
Trade and other payables
746,570
813,274
737,835
Borrowings
1,576,746
933,382
1,183,018
Total current liabilities
2,323,316
1,746,656
1,920,853
Total liabilities
2,323,316
1,746,656
1,920,853
Capital and reserves attributable to shareholders
Share capital
4
1,105,547
1,105,547
1,105,547
Share premium
3,619,332
3,619,332
3,619,332
Share-based payments reserve
474,792
474,792
474,792
Warrants reserve
375,198
375,198
375,198
Merger reserve
31,212,041
31,212,041
31,212,041
Foreign currency translation reserve
(251,714)
(25,065)
(185,673)
Accumulated losses
(38,588,050)
(38,203,140)
(38,308,203)
Total capital and reserves
(2,052,854)
(1,441,295)
(1,706,966)
Total equity and liabilities
270,462
305,361
213,887
Consolidated statements of changes in equity
Share capital
Share premium
Consolidation reserve
Share-based payment reserve
Warrant reserve
Foreign currency translation reserve
Accumulated losses
Total
US$
US$
US$
US$
US$
US$
US$
US$
At 1 January 2020 (audited)
1,103,457
3,586,947
31,212,041
474,792
213,250
(103,376)
(37,836,140)
(1,349,029)
Loss for the period
-
-
-
-
-
(367,000)
(367,000)
Other comprehensive income for the period
-
-
-
-
-
78,311
-
78,311
Total comprehensive loss for the period
-
-
-
-
-
78,311
(367,000)
(288,689)
Issue of share options
2,090
206,871
-
-
-
-
-
208,961
Share issue costs
-
(12,538)
-
-
-
-
-
(12,538)
Issue of warrants
-
(161,948)
-
-
161,948
-
-
-
At 30 June 2020 (unaudited)
1,105,547
3,619,332
31,212,041
474,792
375,198
(25,065)
(38,203,140)
(1,441,295)
At 1 January 2020 (audited)
1,103,457
3,586,947
31,212,041
474,792
213,250
(103,376)
(37,836,140)
(1,349,029)
Loss for the year 2020
-
-
-
-
-
-
(617,574)
(617,574)
Other comprehensive income for the year
-
-
-
-
-
(82,297)
-
(82,297)
Total comprehensive loss for the year
-
-
-
-
-
(82,297)
(617,574)
(699,871)
Issue of shares
2,090
206,871
-
-
-
-
-
208,961
Share issue costs
-
(12,538)
-
-
-
-
(12,538)
Issue of warrants
-
(161,948)
-
-
161,948
-
-
-
At 1 January 2021 (audited)
1,105,547
3,619,332
31,212,041
474,792
375,198
(185,673)
(38,308,203)
(1,706,966)
Loss for the period
-
-
-
-
-
-
(345,866)
(345,866)
Other comprehensive income for the year
-
-
-
-
-
(66,041)
-
(66,041)
Total comprehensive loss for the year
(66,041)
(345,866)
(411,907)
At 30 June 2021 (unaudited)
1,105,547
3,619,332
31,212,041
474,792
375,198
(251,714)
(38,588,050)
(2,052,854)
Consolidated statement of cash flows
Notes
Six months ended
30 June 2021
Unaudited
US$Six months ended
30 June 2020
Unaudited
US$Year ended
31 December 2020
Audited
US$Cash flow from operating activities
Loss before taxation
(345,866)
(367,000)
(617,574)
Adjustments for:
Finance expense
67,847
76,470
111,881
Share-based payments charge
-
-
-
Impairment of exploration assets
-
-
-
Foreign exchange movements
(266)
3,487
(23,106)
Operating cashflows before working capital changes
(278,285)
(287,043)
(528,799)
Changes in working capital:
(Increase)/decrease in receivable
9,519
(2,610)
(10,496)
(Decrease)/ increase in payables
8,735
(13,129)
26,464
Net cash used in operating activities
18,254
(302,782)
(512,831)
Financing activities
Issue of ordinary shares
-
196,423
196,423
Costs of share issue
-
-
-
Proceeds from new borrowings
323,974
227,341
331,760
Net cash flow from financing activities
323,974
423,764
528,183
Net Increase in cash and cash equivalents in the period
63,943
120,982
15,352
Cash and cash equivalents at the beginning of the period
47,188
28,709
28,709
Restricted cash held on deposits
125,000
125,000
125,000
Total cash and cash equivalents at the beginning of the period, including restricted cash
172,188
153,709
153,709
Effect of the translation of cash balances into presentation currency
2,151
(3,142)
3,127
Cash and cash equivalents at the end of the period
113,282
146,549
47,188
Restricted cash held on deposits
125,000
125,000
125,000
Total cash and cash equivalents at the end of the period, including restricted cash
238,282
271,549
172,188
This consolidated financial information has been approved by the Company's Directors.
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
1. General information and basis of preparation
The Company was incorporated and registered in England as a public limited company. The Company's registered number is 09976843 and its registered office is at Kemp House, 152 City Road, London EC1V 2NX. On 4 October 2017, the Company's shares were admitted to the Official List (by way of Standard Listing) and to trading on the London Stock Exchange's Main Market.
With effect from admission, the Company has been subject to the Listing Rules and the Disclosure Guidance and Transparency Rules (and the resulting jurisdiction of the UK Listing Authority) to the extent such rules apply to companies with a Standard Listing pursuant to Chapter 14 of the Listing Rules.
The principal activity of the Company is that of a holding company for its subsidiaries, as well as performing all administrative, corporate finance, strategic and governance functions of the Group. The Company's investments comprise of subsidiaries operating in the natural gas sector.
The Company has the following subsidiary undertakings:
Name
Country of incorporation
Issued capital
Proportion held by Group at reporting date
Activity
Coos Bay Energy LLC
USA
Membership interests
100%
Oil and Gas Exploration
Westport Energy Acquisitions Inc.
USA
Shares
100%
Holding Company
Westport Energy LLC
USA
Membership interests
100%
Holding Company
More information on the individual group companies and timing of their acquisition is presented in the Company's audited consolidated financial information and notes thereto for the year ended 31 December 2020.
2. Accounting policies
The Group Financial statements are presented in US Dollars.
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRIC interpretations as endorsed by the EU ("IFRS") and the requirements of the Companies Act applicable to companies reporting under IFRS.
The preparation of the Group financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Directors to exercise their judgment in the process of applying the Group's accounting policies. The Group's accounting policies as well as the areas, involving a higher degree of judgment and complexity, or areas where assumptions and estimates are significant to the Group financial statements are disclosed in the audited annual report for the year ended 31 December 2020 and are available on the Group's website.
In the opinion of the management, the interim unaudited consolidated financial information includes all adjustments considered necessary for fair and consistent presentation of this financial information. The interim unaudited consolidated financial information should be read in conjunction with the Company's audited financial statements and notes for the year ended 31 December 2020.
Going concern
The Group financial statements have been prepared on a going concern basis as the Directors have assessed the Group's ability to continue in operational existence for the foreseeable future. The operations are currently being financed by third party loans and issuances of new equity. The Group is reliant on the continuing support from its shareholders and the expected support of future shareholders. The Group financial statements do not include the adjustments that would result if the Group were not to continue as a going concern.
Basis of consolidation
The consolidated financial statements of the Group incorporate the financial statements of the Company and entities controlled by the Company, its subsidiaries. More information on the individual group companies, details and timing of their acquisition is presented in the Company's audited consolidated financial information and notes thereto for the year ended 31 December 2020.
At the time of its acquisition by the Company, Coos Bay Energy LLC consisted of Coos Bay Energy LLC and its wholly owned US Group. It is the Directors' opinion that the Company at the date of acquisition of Coos Bay Energy LLC did not meet the definition of a business as defined by IFRS 3 and, therefore, the acquisition is outside on the IFRS 3 scope. Where a party to an acquisition fails to satisfy the definition of a business, as defined by IFRS 3, management have decided to adopt a "merger accounting" method of consolidation as the most relevant method to be used.
The Group consistently applies it to all similar transactions in the following way:
- the acquired assets and liabilities are recorded at their existing carrying values rather than at fair value;
- no goodwill is recorded;
- all intra-group transactions, balances and unrealised gains and losses on transactions are eliminated from the beginning of the first comparative period or inception, whichever is earlier;
- comparative periods are restated from the beginning of the earliest comparative period presented based on the assumption that the companies have always been together;
- all the pre-acquisition accumulated losses of the legal acquire are assumed by the Group as if the companies have always been together;
- all the share capital and membership capital contributions of all the companies included into the legal acquiree sub-group less the Company's cost of investment into these companies are included into the merger reserve; and
- the Company's called up share capital is restated at the preceding reporting date to reflect the value of the new shares that would have been issued to acquire the merged company had the merger taken place at the first day of the comparative period. Where new shares have been issued during the current period that increased net assets (other than as consideration for the merger), these are recorded from their actual date of issue and are not included in the comparative statement of financial position.
The results and cash flows of all the combining entities were brought into the financial statements of the combined entity from the beginning of the financial year in which the combination occurred, adjusted so as to achieve uniformity of accounting policies. The comparative information was restated by including the total comprehensive income for all the combining entities for the previous reporting period and their statement of financial position for the previous reporting date, adjusted as necessary to achieve uniformity of accounting policies.
At 30 June 2021, 30 June 2020 and 31 December 2020, the group results include the results of Curzon Energy Plc, Coos Bay Energy LLC, Westport Energy Acquisitions Inc. and Westport Energy LLC.
Segmental analysis
In the opinion of the Directors, the Group is primarily organised into a single operating segment. This is consistent with the Group's internal reporting to the chief operating decision maker. Separate segmental disclosures have therefore not been included.
3. Loss per share
The basic loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Company by the weighted average number of shares in issue. Diluted loss per share is derived by dividing the loss for the year attributable to ordinary shareholders of the Company by the weighted average number of shares in issue plus the weighted average number of ordinary shares that would be issued on conversion of all dilutive potential ordinary shares into ordinary shares.
The following reflects the loss and share data used in the basic and diluted loss per share computations:
For six months
ended
30 June 2021
UnauditedFor six months
ended
30 June 2020
UnauditedFor year
ended
31 December 2020
Audited
Loss after tax (US$)
(345,886)
(367,000)
(617,574)
Weighted average number of ordinary shares of £0.0001 in issue
99,639,565
85,483,125
92,632,948
Effect of dilutive options and warrants
-
Weighted average number of ordinary shares of £0.01 in issue inclusive of outstanding dilutive options and warrants
99,639,565
85,483,125
92,632,948
Loss per share - basic and fully diluted (US$)
(0.003)
(0.004)
(0.008)
At 30 June 2021, 31 December 2020 and 30 June 2020, the effect of all potentially dilutive instruments was anti-dilutive as it would lead to a further reduction of loss per share, therefore, they were not included into the diluted loss per share calculation. Options and warrants, that could potentially dilute basic EPS in the future, but were not included in the calculation of diluted EPS for the periods presented:
For six months
ended
30 June 2021
UnauditedFor six months
ended
30 June 2020
UnauditedFor year
ended
31 December 2020
Audited
Share options granted to employees - fully vested at the end of the respective period
280,854
280,854
280,854
Warrants given to shareholders as a part of placing equity instruments - fully vested at the end of the respective period
17,606,594
23,243,125
20,612,925
Total instruments fully vested
17,887,448
23,523,979
20,893,779
Total number of instruments and potentially issuable instruments (vested and not vested) not included into the fully diluted EPS calculation
17,887,448
23,523,979
20,893,779
4. Share capital
Issued equity share capital
At 30 June 2021
UnauditedAt 30 June 2020
UnauditedAt 31 December 2020
Audited
Number
US$
Number
US$
Number
US$
Issued and fully paid
Existing Ordinary Shares of £0.01 each
-
-
-
-
-
-
After subdivision*:
New Ordinary shares of £0.0001 each
99,639,565
13,124
99,639,565,
13,124
99,639,565
13,124
Deferred Shares of £0.0099 each
83,032,972
1,092,423
83,032,972
1,092,423
83,032,972
1,092,422
Total Share Capital, US$
1,105,547
1,105,547
1,105,547
*On 6 May 2020, the Company's shareholders approved the subdivision and re-designation of the 83,032,971 Existing Ordinary Shares ("Existing Ordinary Shares") of £0.01 each in the capital of the Company into (i) 83,032,971 New Ordinary Shares ("New Ordinary Shares") of £0.0001 each and (ii) 83,032,971 Deferred Shares ("Deferred Shares") of £0.0099 each in the capital of the Company, and to amend the Company's Articles of Association accordingly.
Each New Ordinary Share carries the same rights in all respects under the amended Articles of Association as each Existing Ordinary Share did under the existing Articles of Association, including the rights in respect of voting and the entitlement to receive dividends. Each Deferred Share carries no rights and is deemed effectively valueless.
Warrants
On 30 June 2021, the following warrants were in issue:
Warrant exercise price
Number of warrants granted
Expiry date
Fair value of individual option
£0.015
17,606,594
3 June 2022
£0.00731
Total warrants in issue at 30 June 2021
17,606,594
5. Administrative expenses
For six months
ended
30 June 2021
Unaudited
US$For six months
ended
30June 2020
Unaudited
US$For year
ended
31 December 20120
Audited
US$
Staff costs
Directors' salaries
121,459
115,382
241,376
Consultants
10,411
28,363
42,445
Employer's NI
1,786
5,254
15,891
Professional services
Accounting, audit & taxation
26,482
38,181
74,752
Legal
48,722
-
-
Marketing
-
9,573
12,235
Other
13,716
18,411
-
Regulatory compliance
15,805
15,681
93,484
Standard Listing Regulatory Costs
-
2,098
-
Travel
-
485
492
Business development
-
-
-
Office and Admin
General
9,204
5,215
-
IT related costs
5,891
2,164
1,622
Mineral rights lease (outside of IFRS 16 scope)
-
24,190
11,349
Temporary storage and office rent
4,631
9,440
19,140
Insurance
20,098
12,606
16,013
Total administrative costs
278,305
287,043
528,799
6. Borrowings
The following loans from third parties were outstanding during the six months ended 30 June 2021. Details of the notes are disclosed in the table below:
Origination date
Contractual settlement date
Loan value in original currency (principal)
Annual interest rate
Security
C4 Energy Ltd
3 Oct 2018
1 Oct 2020
$100,000
10%
Unsecured
C4 Energy Ltd
25 Apr 2019
1 Oct 2020
$100,000
10%
Unsecured
Bruce Edwards
1 Sep 2017
1 Oct 2019
$100,000
15%
Unsecured
Poseidon Enhanced Technologies Limited
3 Feb 2020
3 Feb 2021
£240,000
10%
Unsecured
HNW Investor Group
26 Jun 2019
1 Oct 2020
£200,000
13%
100% of Coos Bay assets
Sun Seven Stars Investment Group
13 Mar 2020
30 Sept 2021
£260,000
10%
Unsecured
The Company has entered into a loan agreement with Poseidon Enhanced Technologies Limited in the form of a one-year note, carrying an annual interest rate of 10% per annum and convertible at a price of any subsequent share issue alongside the contemplated RTO transaction. A total of £500,000 is authorised to be made available, of which £240,000 has been drawn down as of 30 June 21.
No interim payments are required under the promissory notes, as the payment terms require the original principal amount of each note, and all accrued interest thereon, to be paid in single lump payments on the respective contractual settlement dates.
30 June 2021
Unaudited
US$30 June 2020
Unaudited
US$31 December 2020
Audited
US$
At the beginning of the period
1,183,018
698,798
698,798
Received during the year
332,040
227,341
331,760
Interest accrued during the period
67,847
49,960
109,943
Exchange rate differences
(6,159)
(42,717)
42,517
At the end of the period
1,576,746
933,382
1,183,018
For further information please contact:
Curzon Energy Plc
+44 (0) 20 7747 9980
Scott Kaintz
SP Angel Corporate Finance LLP
+44 (0) 20 3470 0470
Broker
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