Source - LSE Regulatory
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
30 June 2022
Unaudited
US$

Six months ended
30 June 2021
Unaudited
US$

Year ended
31 December 2021
Audited
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 currency into presentation currency


228,293

(66,041)

39,119

 


 



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
Unaudited
US$

At 30 June 2021
Unaudited
US$

At 31 December 2021
Audited
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

 

(860,463)

(821,344)










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
30 June 2022
Unaudited
US$

Six months ended
30 June 2021
Unaudited
US$

Year ended
31 December 2021
Audited
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 restricted cash


263,142

172,188

172,188

 


 



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 cash

 

198,868

238,282

263,142

 

 

 

 

 

 

 

 

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

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
ended
30 June 2022
Unaudited

For six months
ended
30 June 2021
Unaudited

For year
ended
31 December 2021
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 outstanding dilutive options and warrants

99,639,565

99,639,565

99,639,565

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
ended
30 June 2022
Unaudited

For six months
ended
30 June 2021
Unaudited

For year
ended
31 December 2021
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

17,606,594

 

 

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 not vested) not included into the fully diluted EPS calculation

17,887,448

17,887,448

 

 

18,887,448



 

4.      Share capital

Issued equity share capital


At 30 June 2022
Unaudited

At 30 June 2021
Unaudited

At 31 December 2021
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
ended
30 June 2022
Unaudited
US$

For six months
ended
30June 2021
Unaudited
US$

For year
ended
31 December 2021
Audited
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

 

Conversion at RTO date

$100,000

15%

unsecured

 

HNW Investor Group

1 July 2019

Conversion/Repayment at RTO date

£263,265

13%

100% interest in Coos Bay LLC

 

Sun Seven Stars Investment Group ("SSSIG")

13 Mar 2020

Conversion/Repayment at RTO date

£260,000

10%

unsecured

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
Unaudited
US$

30 June 2021
Unaudited
US$

31 December 2020
Audited
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

 

 

 

SP Angel Corporate Finance LLP

+44 (0) 20 3470 0470

Broker

 

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