REG - Curzon Energy plc - 2022 Interim Results
27/09/2022 07:00
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RNS Number : 7148A Curzon Energy PLC 27 September 2022
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.
27 September 2022
Curzon Energy Plc
("Curzon" or the "Company")
Unaudited Half-Year Results for the Six Months Ended 30 June 2022
Curzon Energy plc (LON:CZN) the London Stock Exchange listed oil and gas
development company, announces its unaudited interim results for the six
months to 30 June 2022.
CHAIRMAN'S STATEMENT
I am pleased to present the interim report for the Company covering its
results for the six months ended 30 June 2022.
Financial review
The Company incurred a loss of US$ 180,131 in the period. A majority of this
loss comprised expenditures in relation to the maintenance of the commercial
potential of its Coos Bay CBM project as well as listing related corporate
overheads in London. Additional expenditures were incurred conducting due
diligence on a potential transaction with Poseidon Enhanced Technologies
("PET").
Net cash of US$109,796 as at 30 June 2022 (US$182,200 as at 31 December
2021). Basic loss per share of US$ 0.004 (period ended 30 June 2021: US$
0.003).
Given the nature of the business and its development strategy, it is unlikely
that the Board will recommend a dividend in the foreseeable future.
Outlook
The Company's near-term goals remains focused on both exploring ongoing
opportunities and license renewals associated with the Company's historic Coos
Bay coal bed methane project, as well as exploring a potential reverse
takeover transaction. While the Company believes the Coos Bay assets hold
residual potential value, the failure of the Jordan Cove LNG terminal to be
progressed, the distance from existing oil and gas infrastructure and
services, as well as challenges in renewing the historic licenses at a
reasonable cost have all proven to be obstacles to reengaging the
project.
Due diligence efforts on the potential transaction with PET have taken longer
than expected to date with both market turmoil in general and volatility in
the plastics markets causing uncertainties on the timing of any transaction.
We continue to assess the PET transaction, as well as other potential
transactions as the most attractive way forward for the business, however,
there remains no certainty that a transaction as currently envisioned will be
consummated.
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.
We will update shareholders on our progress in due course.
John McGoldrick
Chairman and Non-Executive Director
CHIEF EXECUTIVE OFFICER'S REVIEW
While exploring RTO options, 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 two
major lease owners.
In London the Company has kept the cost basis low over the course of the year,
recognizing the need to maintain a minimum operating base in current market
conditions. Meanwhile, discussions and data sharing continue with PET, with
the Company looking to provide clarity on the transaction as soon as is
feasible.
While the pacing of these developments have been somewhat delayed, we
appreciate the patience of all stakeholders as we work through these various
delays.
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 2022
Notes Six months ended Six months ended Year ended
30 June 2022
30 June 2021
31 December 2021
Unaudited
Unaudited
Audited
US$
US$
US$
Administrative expenses 5 (307,999) (278,305) (569,865)
Loss from operations (307,999) (278,305) (569,865)
Finance expense 6 (98,067) (67,847) (159,087)
Provision for reclamation obligation - - (125,000)
Foreign exchange differences (2,358) 266 (6,511)
Loss before taxation (408,424) (345,886) (860,463)
Income tax expense - - -
Loss for the period attributable to equity holders of the parent company (408,424) (345,866) (860,463)
Other comprehensive income/(expense)
Gain/(loss) on translation of parent net assets and results from functional 228,293 (66,041) 39,119
currency into presentation currency
Total comprehensive loss for the period (180,131) (411,907) (821,344)
(Loss) per share
Basic and diluted, US$ (0.004) ( (0.003) ( (0.009) (
Consolidated statements of financial position
Notes At 30 June 2022 At 30 June 2021 At 31 December 2021
Unaudited
Unaudited
Audited
US$
US$
US$
Assets
Non-current assets
Intangible assets - - -
Property, plant and equipment - - -
Restricted cash - 125,000 -
Total non-current assets - 125,000 -
Current assets
Prepayments and other receivables 35,928 32,180 44,058
Cash and cash equivalents 73,868 113,282 138,142
Total current assets 109,796 145,462 182,200
Total assets 109,796 270,462 182,200
Liabilities
Current liabilities
Trade and other payables 766,976 746,570 774,591
Borrowings 2,051,261 1,576,746 1,935,919
Total current liabilities 2,818,237 2,323,316 2,710,510
Total liabilities 2,818,237 2,323,316 2,710,510
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 81,739 (251,714) (146,554)
Accumulated losses (38,577,090) (38,588,050) (39,168,666)
Total capital and reserves (2,708,441) (2,052,854) (2,528,310)
Total equity and liabilities 109,796 270,462 182,200
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 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)
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 year 2021 - - - - - - (860,463) (860,463)
Other comprehensive income for the year - - - - - 39,199 - 39,199
Total comprehensive loss for the year - - - - - 39,199 (821,344)
(860,463)
At 1 January 2022 (audited) 1,105,547 3,619,332 31,212,041 474,792 375,198 (146,554) (39,168,666) (2,528,310)
Loss for the period - - - - - - (408,424) (408,424)
Other comprehensive income for the year - - - - - 228,293 - 228,293
Total comprehensive loss for the year 228,293 (408,424) (180,131)
At 30 June 2021 (unaudited) 1,105,547 3,619,332 31,212,041 474,792 375,198 81,739 (39,577,090) (2,708,441)
Consolidated statement of cash flows
Notes Six months ended Six months ended Year ended
30 June 2022
30 June 2021
31 December 2021
Unaudited
Unaudited
Audited
US$
US$
US$
Cash flow from operating activities
Loss before taxation (408,424) (345,866) (860,463)
Adjustments for:
Finance expense 98,067 67,847 159,087
Share-based payments charge - - -
Provision for reclamation obligations - - 125,000
Foreign exchange movements 2,358 (266) 6,511
Operating cashflows before working capital changes (307,999) (278,285) (569,865)
Changes in working capital:
(Increase)/decrease in receivable 5,453 9,519 (2,359)
(Decrease)/ increase in payables 64,135 8,735 46,220
Net cash used in operating activities (238,411) (260,031) (526,004)
Financing activities
Issue of ordinary shares - - -
Costs of share issue - - -
Proceeds from new borrowings 184,693 323,974 619,886
Net cash flow from financing activities 184,693 323,974 619,886
Net Increase in cash and cash equivalents in the period (53,718) 63,943 93,882
Cash and cash equivalents at the beginning of the period 138,142 47,188 47,188
Restricted cash held on deposits 125,000 125,000 125,000
Total cash and cash equivalents at the beginning of the period, including 263,142 172,188 172,188
restricted cash
Effect of the translation of cash balances into presentation currency (10,556) 2,151 (2,927)
Cash and cash equivalents at the end of the period 73,868 113,282 138,142
Restricted cash held on deposits 125,000 125,000 125,000
Total cash and cash equivalents at the end of the period, including restricted 198,868 238,282 263,142
cash
The accompanying notes are an integral part of this consolidated financial
information.
This consolidated financial information has been approved by the Company's
directors.
Curzon Energy Plc
Interim financial information for the six months ended 30 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
1. General information and basis of preparation
The Company was incorporated and registered in England and 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% Holding company
Westport Energy Acquisitions, Inc. USA Shares 100% Holding company
Westport Energy, LLC USA Membership interests 100% Oil and gas exploration
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 2021.
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 2021
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 2021.
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 2019.
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 2022, 30 June 2021 and 31 December 2021, the group results include
the results of Curzon Energy Plc, Coos Bay Energy, LLC, Westport Energy
Acquisitions, Inc. and Westport Energy, LLC.
2. 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 For six months For year
ended
ended
ended
30 June 2022
30 June 2021
31 December 2021
Unaudited
Unaudited
Audited
Loss after tax (US$) (408,242) (345,886) (860,463)
Weighted average number of ordinary shares of £0.0001 in issue 99,639,565 99,639,565 99,639,565
Effect of dilutive options and warrants -
Weighted average number of ordinary shares of £0.01 in issue inclusive of 99,639,565 99,639,565 99,639,565
outstanding dilutive options and warrants
Loss per share - basic and fully diluted (US$) (0.004) (0.003) (0.009)
At 30 June 2022, 31 December 2021 and 30 June 2021 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 For six months For year
ended
ended
ended
30 June 2022
30 June 2021
31 December 2021
Unaudited
Unaudited
Audited
Share options granted to employees - fully vested at the end of the respective 280,854 280,854
period
280,854
Warrants given to shareholders as a part of placing equity instruments - fully 17,606,594 17,606,594
vested at the end of the respective period
18,606,594
Total instruments fully vested 17,887,448 17,887,448 18,887,448
Total number of instruments and potentially issuable instruments (vested and 17,887,448 17,887,448
not vested) not included into the fully diluted EPS calculation
18,887,448
4. Share capital
Issued equity share capital
At 30 June 2022 At 30 June 2021 At 31 December 2021
Unaudited
Unaudited
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 2022, the following warrants were in issue:
Warrant exercise price Number of warrants granted Expiry date Fair value of individual option
£0.011 1,000,000 1 October 2022 £0.0056
Total warrants in issue at 30 June 2022 1,000,000
5. Administrative expenses
For six months For six months For year
ended
ended
ended
30 June 2022
30June 2021
31 December 2021
Unaudited
Unaudited
Audited
US$
US$
US$
Staff costs
Directors' salaries 128,625 121,459 254,842
Consultants 15,514 10,411 13,219
Employer's NI 7,282 1,786 22,729
Professional services
Accounting, audit & taxation 45,390 26,482 90,527
Legal 4,512 48,722 -
Marketing 2,668 - 14,447
Other - 13,716 440
Regulatory compliance 29,521 15,805 63,298
Standard Listing Regulatory Costs - - 48,351
Travel 12,840 - -
Business development - - -
Office and Admin
General 23,583 9,204 11,716
IT related costs 1,792 5,891 -
Mineral rights lease (outside of IFRS 16 scope) - - -
Temporary storage and office rent 17,684 4,631 7,199
Insurance 18,588 20,098 43,097
Total administrative costs 307,999 278,305 569,865
6. Borrowings
The following loans from third parties were outstanding during the six months
ended 30 June 2022. 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 22 Sept 2017 Conversion/Repayment at RTO date $200,000 15% unsecured
Bruce Edwards 1 Sep 2017 $100,000 15% unsecured
Conversion at RTO date
1 July 2019 Conversion/Repayment at RTO date £263,265 13% 100% interest in Coos Bay LLC
HNW Investor Group
13 Mar 2020 Conversion/Repayment at RTO date £260,000 10% unsecured
Sun Seven Stars Investment Group ("SSSIG")
Poseidon Plastics Limited ("PPL") 2 February 2021 14 February 2023* £590,000 10% unsecured
No interim payments are required under the promissory notes, as the payment
terms require the original principal amount of each note, and all accrued
interest thereon, to be paid in single lump payments on the respective
contractual settlement dates.
30 June 2022 30 June 2021 31 December 2020
Unaudited
Unaudited
Audited
US$
US$
US$
At the beginning of the period 1,935,919 1,183,018 1,183,018
Received during the year 197,885 332,040 619,886
Interest accrued during the period 97,065 67,847 158,564
Exchange rate differences (179,608) (6,159) (25,549)
At the end of the period 2,051,261 1,576,746 1,935,919
7. Post balance sheet events
On 15 July 2022 the Company announced that it continued active discussions
regarding the potential extension of PET's exclusivity rights in contemplation
of a reverse takeover transaction.
For further information please contact:
Curzon Energy Plc +44 (0) 20 7747 9980
Scott Kaintz
www.curzonenergy.com (http://www.curzonenergy.com)
SP Angel Corporate Finance LLP +44 (0) 20 3470 0470
Broker
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