CURZON ENERGY PLC

Quarterly Report • Sep 13, 2021

National Storage Mechanism | Additional information

RNS Number : 4825L

Curzon Energy PLC

13 September 2021

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 Unaudited	For six months ended 30 June 2020 Unaudited	For 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 Unaudited	For six months ended 30 June 2020 Unaudited	For 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 Unaudited		At 30 June 2020 Unaudited		At 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
www.curzonenergy.com
SP Angel Corporate Finance LLP	+44 (0) 20 3470 0470

Broker

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