Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.
27 September 2019
Curzon Energy Plc
("Curzon" or the "Company")
Unaudited Half-Year Results for the Six Months Ended 30 June 2019
Curzon Energy plc (LON:CZN) the London Stock Exchange listed oil and gas development company, pursuing a targeted strategy of upstream North American natural gas appraisal and development assets, announces its unaudited interim results for the six months to 30 June 2019.
CHAIRMAN'S STATEMENT
I am pleased to present the interim report for the Company covering its results for the six months ended 30 June 2019.
Financial review
The Company incurred a loss of US$583,867 in the period. A majority of this loss comprised expenditures in relation to the evaluation and maintenance of the commercial potential of its Coos Bay CBM project. Additional expenditures were occurred conducting due diligence on the potential acquisition of an interest in the Texas Gas Project.
Net cash of US$79,234 as at 30 June 2019 (US$451,188 as at 31 December 2018). Basic loss per share of US$0.006 (period ended 30 June 2018: US$0.007).
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 goal remains focused on completing due diligence and finalizing a transaction with Pared Energy to participate in the Texas Gas Project. These interim accounts also demonstrate the progress made in the Company's cost-reduction efforts over the past year.
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 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's focus remains on maximizing value in its existing Coos Bay coal bed methane project, while progressing a potential transaction with Pared Energy for the acquisition of an interest in the Texas Gas Project and participating in a drilling campaign in Texas.
Additionally, the Company continues to assess additional oil and gas opportunities on an ongoing basis. While progress to date has largely occurred behind the scenes, we look forward to delivering on such initiatives in the near term.
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 2019
|
Notes |
Six months ended |
Six months ended |
Year ended |
||
|
|
|
|
|
||
Administrative expenses |
6 |
(571,292) |
(511,951) |
(1,363,949) |
||
|
|
|
|
|
||
Loss from operations |
|
(571,292) |
(511,951) |
(1,363,949) |
||
Finance expense, net |
7 |
(14,645) |
(31,893) |
(42,321) |
||
Impairment of exploration and evaluation assets |
|
- |
- |
(575,316) |
||
Foreign exchange differences |
|
2,070 |
12,854 |
-27,878 |
||
|
|
|
|
|
||
Loss before taxation |
|
(583,867) |
(530,990) |
(1,953,708) |
||
Income tax expense |
|
- |
- |
- |
||
|
|
|
|
|
||
Loss for the period attributable to equity holders of the parent company |
|
(583,867) |
(530,990) |
(1,953,708) |
||
|
|
|
|
|
||
Other comprehensive income/(expense) |
|
|
|
|
||
Gain/(loss) on translation of parent net assets and results from functional currency into presentation currency |
|
6,474 |
(4,716) |
(70,245) |
||
|
|
|
|
|
||
Total comprehensive loss for the period |
|
(577,393) |
(535,706) |
(2,023,953) |
||
|
|
|
|
|
||
(Loss) per share |
|
|
|
|
||
Basic and diluted, US$ |
4 |
(0.007) |
(0.007) |
(0.026) |
||
Consolidated statements of financial position
|
Notes |
At 30 June 2019 |
At 30 June 2018 |
At 31 December 2018 |
Assets |
|
|
|
|
Non-current assets |
|
|
|
|
Intangible assets |
|
2,559,000 |
3,302,444 |
2,559,000 |
Restricted cash |
|
125,000 |
125,000 |
125,000 |
Total non-current assets |
|
2,684,000 |
3,427,444 |
2,684,000 |
|
|
|
|
|
Current assets |
|
|
|
|
Prepayments and other receivables |
|
65,336 |
175,638 |
36,157 |
Cash and cash equivalents |
|
79,234 |
451,188 |
125,621 |
Total current assets |
|
144,570 |
626,826 |
161,778 |
Total assets |
|
2,828,570 |
4,054,270 |
2,845,778 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current liabilities |
|
|
|
|
Trade and other payables |
|
701,442 |
514,496 |
506,894 |
Borrowings |
7 |
453,964 |
586,998 |
213,812 |
Total current liabilities |
|
1,155,406 |
1,101,494 |
720,706 |
|
|
|
|
|
Total liabilities |
|
1,155,406 |
1,101,494 |
720,706 |
|
|
|
|
|
Capital and reserves attributable to shareholders |
|
|
|
|
Share capital |
5 |
1,103,457 |
964,575 |
1,024,036 |
Share premium |
|
3,586,948 |
3,199,004 |
3,563,122 |
Share-based payments reserve |
|
454,026 |
217,062 |
454,026 |
Warrants reserve |
|
213,249 |
191,011 |
191,011 |
Merger reserve |
|
31,212,041 |
31,212,041 |
31,212,041 |
Foreign currency translation reserve |
|
(57,300) |
1,755 |
(63,774) |
Accumulated losses |
|
(34,839,257) |
(32,832,672) |
(34,255,390) |
Total capital and reserves |
|
1,673,164 |
2,952,776 |
2,125,072 |
Total equity and liabilities |
|
2,828,570 |
4,054,270 |
2,845,778 |
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 2018 (audited) |
964,575 |
3,199,004 |
31,212,041 |
114,659 |
191,011 |
6,471 |
(32,301,682) |
3,386,079 |
Loss for the period |
- |
- |
- |
- |
- |
- |
(530,990) |
(530,990) |
Other comprehensive income for the period |
- |
- |
- |
- |
- |
(4,716) |
- |
(4,716) |
Total comprehensive loss for the period |
- |
- |
- |
- |
- |
(4,716) |
(530,990) |
(535,706) |
Issue of share options |
- |
- |
- |
102,403 |
- |
- |
- |
102,403 |
At 30 June 2018 (unaudited) |
964,575 |
3,199,004 |
31,212,041 |
217,062 |
191,011 |
1,755 |
(32,832,672) |
2,952,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January 2018 (audited) |
964,575 |
3,199,004 |
31,212,041 |
114,659 |
191,011 |
6,471 |
(32,301,682) |
3,386,079 |
Loss for the year 2018 |
- |
- |
- |
- |
- |
- |
(1,953,708) |
(1,953,708) |
Other comprehensive income for the year |
- |
- |
- |
- |
- |
(70,245) |
- |
(70,245) |
Total comprehensive loss for the year |
- |
- |
- |
- |
- |
(70,245) |
(1,953,708) |
(2,023,953) |
Issue of shares |
59,461 |
416,223 |
- |
- |
- |
- |
|
475,684 |
Share issue costs |
- |
(52,105) |
- |
- |
|
- |
|
(52,105) |
Issue of share options |
- |
- |
- |
339,367 |
- |
- |
- |
339,367 |
|
|
|
|
|
|
|
|
|
At 1 January 2019 (audited) |
1,024,036 |
3,563,122 |
31,212,041 |
454,026 |
191,011 |
(63,774) |
(34,255,390) |
2,125,072 |
Loss for the period |
- |
- |
- |
- |
- |
- |
(583,867) |
(583,867) |
Other comprehensive income for the year |
- |
- |
- |
- |
- |
6,474 |
- |
6,474 |
Total comprehensive loss for the year |
- |
- |
- |
- |
- |
6,474 |
(583,867) |
(577,393) |
Issue of shares |
79,421 |
46,064 |
- |
- |
- |
- |
- |
125,485 |
Issue of share warrants |
- |
(22,238) |
- |
- |
22,238 |
- |
- |
- |
At 30 June 2019 (unaudited) |
1,103,457 |
3,586,948 |
31,212,041 |
454,026 |
213,249 |
(53,300) |
34,839,257 |
1,673,164 |
Consolidated statement of cash flows
|
Notes |
Six months ended |
Six months ended |
Year ended |
Cash flow from operating activities |
|
|
|
|
Loss before taxation |
|
(583,867) |
(530,990) |
(1,953,708) |
Adjustments for: |
|
|
|
|
Finance cost, net |
|
14,645 |
31,893 |
42,321 |
Share-based payments charge |
|
- |
102,403 |
339,367 |
Foreign exchange movements |
|
(2,070) |
(12,854) |
(27,878) |
Operating cashflows before working capital changes |
|
(571,292) |
(409,548) |
(1,024,582) |
Changes in working capital: |
|
|
|
|
(Increase)/decrease in receivable |
|
(29,180) |
(27,022) |
112,461 |
Increase/(decrease) in payables |
|
203,185 |
35,814 |
(22,541) |
Net cash used in operating activities |
|
(397,287) |
(400,756) |
(934,662) |
|
|
|
|
|
Investing activities |
|
|
|
|
Capitalised exploration costs |
|
- |
(743,444) |
(575,316) |
Net cash flow from investing activities |
|
- |
(743,444) |
(575,316) |
|
|
|
|
|
Financing activities |
|
|
|
|
Issue of ordinary shares |
|
125,485 |
- |
- |
Costs of share issue |
|
- |
- |
(52,105) |
Proceeds from new borrowings |
|
227,048 |
- |
100,000 |
Net cash flow from financing activities |
|
352,533 |
- |
47,895 |
Net Increase in cash and cash equivalents in the period |
|
(44,754) |
(1,144,200) |
(1,462,083) |
|
|
|
|
|
Cash and cash equivalents at the beginning of the period |
|
125,621 |
1,595,035 |
1,595,035 |
Restricted cash held on deposits |
|
125,000 |
125,440 |
125,440 |
Total cash and cash equivalents at the beginning of the period, including restricted cash |
|
250,621 |
1,720,475 |
1,720,475 |
|
|
|
|
|
Effect of the translation of cash balances into presentation currency |
|
(1,633) |
353 |
(7,331) |
(Decrease)/increase in restricted cash |
|
- |
(440) |
(440) |
Cash and cash equivalents at the end of the period |
|
79,234 |
451,188 |
125,621 |
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 |
|
204,234 |
576,188 |
250,621 |
NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION
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 |
Curzon Energy, Inc.** |
USA |
Shares |
100% |
Holding company |
Rigel Energy, LLC** |
USA |
Membership interests |
100% |
Holding company |
*All the above subsidiaries have same registered office with address 1001 SW 5th Avenue, Suite 1100, Portland, OR 97204, USA.
**These subsidiaries have a registered office with address Corporation Trust Center,1209 Orange Street, City of Wilmington, New Castle County, Delaware 19801.
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 2018.
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 2018 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 2018.
IFRS 16 Leases was applied in this financial information for the first time. There is no material effect on the Group's account on IFRS 16 adoption. All the Group's leases are short-term leases, which are month-to-month obligations (i.e., US virtual office and US storage operating leases).
All operating land lease agreements for the oil and gas exploration areas are outside of the scope of IFRS 16. Coos County annual land lease payment is US$28,971 and is payable bi-annual instalments with payment due in April and October.
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.
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 2018.
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 2019, the Group results include the results of all the subsidiaries included in Note 1. At 30 June 2018 and 31 December 2018, 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. Pro forma basic and diluted 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 |
|
|
|
|
Loss after tax (US$) |
(583,867) |
(530,990) |
(1,953,708) |
Weighted average number of ordinary shares of £0.01 in issue |
80,995,897 |
72,594,700 |
74,449,821 |
Effect of dilutive options and warrants |
- |
- |
- |
Weighted average number of ordinary shares of £0.01 in issue inclusive of outstanding dilutive options and warrants |
80,995,897 |
72,594,700 |
74,449,821 |
Loss per share - basic and fully diluted (US$) |
0.007 |
0.007 |
0.026 |
At 30 June 2019, 31 December 2018 and 30 June 2018, the effect of all potentially dilutive instruments was anti-dilutive as it would lead to a further reduction of loss per share, therefore they were not included into the diluted loss per share calculation.
4. Share capital
Authorised share capital
The Company's authorised share capital at 30 June 2019 was 500,000,000 shares of £0.01 per share up to an aggregate nominal amount of £5,000,000, which was authorised by the Directors on 26 June 2019.
Issued equity share capital
|
At 30 June 2019 |
At 31 December 2018 |
At 30 June 2018 |
|||
|
Number |
US$ |
Number |
US$ |
Number |
US$ |
Issued and fully paid |
|
|
|
|
|
|
Ordinary shares of £0.01 each |
83,032,972 |
1,103,457 |
77,020,316 |
1,024,036 |
72,594,700 |
964,575 |
The Company has one class of Ordinary shares which carry no right to fixed income.
5. Administrative expenses
|
|
For six months |
For six months |
For year |
|
|
|
|
|
Staff costs |
|
|
|
|
Directors' salaries |
|
81,064 |
186,582 |
726,767 |
Consultants |
|
33,111 |
27,703 |
64,965 |
Employers NI |
|
5,949 |
- |
1,968 |
Professional services |
|
|
|
|
Accounting, audit & taxation |
|
53,178 |
53,020 |
98,356 |
Legal |
|
- |
17,647 |
68,655 |
Marketing |
|
17,771 |
3,822 |
57,422 |
Other |
|
8,961 |
- |
31,202 |
Regulatory compliance |
|
45,286 |
108,465 |
130,830 |
Standard Listing Regulatory Costs |
|
269,532 |
- |
- |
Travel |
|
6,069 |
21,353 |
41,614 |
Office and Admin |
|
|
|
|
General |
|
5,324 |
43,162 |
64,165 |
IT related costs |
|
2,039 |
3,949 |
2,379 |
Rent |
|
27,456 |
25,910 |
41,552 |
Insurance |
|
15,552 |
20,337 |
34,074 |
|
|
571,292 |
511,950 |
1,363,949 |
6. Borrowings
The following loans from third parties were outstanding during the six months ended 30 June 2019. Details of the notes are disclosed in the table below:
|
Origination date |
Contractual settlement date |
Note value in original currency |
Note value, US$ |
Annual interest rate |
Security |
Settlement details |
|
|
|
|
|
|
|
|
YA Global |
3 Oct 2018 |
30 Oct 2020 |
$100,000 |
$100,000 |
10% |
Unsecured |
Outstanding |
YA Global |
25 Apr 2019 |
30 Apr 2020 |
$100,000 |
$100,000 |
10% |
Unsecured |
Outstanding |
Bruce Edwards |
1 Sep 2017 |
1 Oct 2019 |
$100,000 |
$100,000 |
15% |
Unsecured |
Outstanding |
Bespoke Capital Solutions |
26 Jun 2019 |
1 Oct 2019 |
£100,000 |
$127,048 |
13% |
100% of Coos Bay assets |
Outstanding |
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 2019 |
30 June 2018 |
31 December 2018 |
|
|
|
|
At the beginning of the period |
213,812 |
578,599 |
578,599 |
Received during the year |
227,048 |
- |
100,000 |
Interest accrued during the period |
14,645 |
31,893 |
42,321 |
Exchange rate differences |
(1,541) |
(23,494) |
(31,424) |
Discharged during the year by issue of shares in Curzon |
- |
- |
(475,684) |
At the end of the period |
453,694 |
586,998 |
213,812 |
7. Post balance sheet events
On 4 July 2019, the Company announced that had agreed to issue £200,000 of secured loan notes to high net worth investors. The notes yield 13% per annum, are due for repayment on 1 October 2019, carry a 5% redemption fee, and are secured on the Company's interest in Coos Bay Energy. Further, the Company agreed to issue these investors warrants over 1,000,000 shares in the capital of the Company, exercisable at a price of £0.02 for a period of 18 months. The proceeds of these loan notes were to be used for working capital and costs associated with the diligence and negotiations of a transaction with Pared Energy, LLC and the Texas Gas Project, as announced on 29 March 2019, 20 December 2018, and 21 November 2018.
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 |
Richard Hail |
|
Stephen Wong |
|
|
|
Optiva Securities Limited |
+44 (0) 20 3137 1902 |
Christian Dennis |
|