CURZON ENERGY PLC

Earnings Release • Sep 27, 2022

National Storage Mechanism | Additional information

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	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 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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