Usha Resources Ltd. — Interim / Quarterly Report 2022

Apr 4, 2022

CANADA ENERGY PARTNERS INC. UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS THREE AND NINE MONTHS ENDED JANUARY 31, 2022 (EXPRESSED IN CANADIAN DOLLARS) (UNAUDITED)

Notice To Reader

The accompanying unaudited condensed interim consolidated financial statements of Canada Energy Partners Inc. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

(Unaudited)

	January 31,2022
ASSETS
Current assets
Cash	$402,504	$	68,875
Prepaid and deposits	77,558		26,484
Reclamation deposit (note 3)	87,859		87,859
Total assets	$567,921	$	183,218
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and accrued liabilities	$323,829	$	306,910
Current portion of decommissioning liability	62,299		62,299
Total liabilities	386,128		369,209
Equity
Share capital (note 6)	72,788,398		71,614,763
Share-based payment reserve (note 6)	8,549,366		8,549,366
Deficit	(81,155,971)		(80,350,120)
Total equity	181,793		(185,991)
Total liabilities and equity	$567,921	$	183,218

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Business of the Company and going concern (note 1) Subsequent events (note 11)

On Behalf of the Board:

"Grant Hall" "Ben Jones" Director Director

Condensed Interim Consolidated Statements of loss and Comprehensive loss (Expressed in Canadian Dollars)

(Unaudited)

	Three MonthsEndedJanuary 31,2022	Three MonthsEndedJanuary 31,2021	Nine MonthsEndedJanuary 31,2022	Nine MonthsEndedJanuary 31,2021
Operating Expenses
Audit and accounting	$5,000	$5,000	$26,084	$22,300
Filing and regulatory	727	4,733	5,011	22,412
General exploration	44	6,592	14,762	23,946
Well maintenance	-	742	-	5,920
Legal	6,313	12,763	21,709	51,223
Investor relations	38,977	90,000	47,160	102,500
Director fees	10,000	-	14,000	-
Office and miscellaneous	4,663	5,621	14,537	6,481
Professional fees	109,409	35,000	380,753	87,267
Travel	14,860	8,522	51,403	8,522
Comprehensive loss before below items	(189,993)	(168,973)	(575,419)	(330,571)
Write of of accounts payable	-	-	9,321	597,022
Gain on sale of assets	-	-	19,200	-
Loss due to theft	-	-	(255,543)	-
Accretion	-	(260)	-	(685)
Interest expense	-	-	-	(11,704)
Foreign exchange gain (loss)	631	(5,358)	(3,410)	7,509
Net income (loss) and comprehensiveincome (loss) for the period	$(189,362)	$(174,591)	$(805,851)	$261,571
Income (loss) per share - Basic and diluted	$(0.01)	$(0.02)	$(0.06)	$0.05
Weighted average number of commonshares outstanding - basic and diluted	15,157,784	7,392,741	13,750,501	5,267,885

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Condensed Interim Consolidated Statements of Changes in Equity January 31, 2022 (Expressed in Canadian Dollars) (Unaudited)

	Share Capital
	Number of shares	Amount	Share-basedpayment reserve	(Deficit)	Total
Balance, May 1, 2020	3,615,784	$71,124,785	$8,549,366	$(80,532,938)	$(858,787)
Shares issued for private placement, net of issuance cost	4,480,000	489,978	-	-	489,978
Net loss for the period	-	-	-	261,571	261,571
Balance, January 31, 2021	8,095,784	71,614,763	8,549,366	(80,271,367)	1,179,712
Balance, May 1, 2021	8,095,784	$71,614,763	$8,549,366	$(80,350,120)	$(185,991)
Shares issued for private placement, net of issuance cost	12,114,500	1,173,635	-	-	1,173,635
Net loss for the period	-	-	-	(805,851)	(805,851)
Balance, January 31, 2022	20,210,284	$72,788,398	$8,549,366	$(81,155,971)	$181,793

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

• 3 -

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

(Unaudited)

Nine months ended January 31,	2022	2021
Operating activities
Net income (loss) for the period	$(805,851)	$261,571
Accretion	-	685
Interest expense	-	11,704
Write off of accounts payable	(9,321)	(597,022)
Gain on sale of assets	(19,200)	-
Non-cash working capital items:
Accounts receivable and prepaid deposits	(51,074)	(18,957)
Accounts payable and accrued liabilities	45,440	(204,902)
Net cash provided by operating activities	(840,006)	(546,921)
Investing activities
Redemption of reclamation deposit	-	120,353
Net cash provided by investing activities	-	120,353
Financing activities
Repayment of loans	-	(11,000)
Shares issued from private placement	1,286,950	560,000
Share issue cost	(113,315)	(70,022)
Net cash provided by financing activities	1,173,635	478,978
Net change in cash	333,629	52,410
Cash, beginning of period	68,875	4,033
Cash, end of period	$402,504	$56,443

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

1. Nature of operations and liquidity risk

Canada Energy Partners Inc. ("the Company") is an independent natural gas exploration and development company focused primarily on conventional oil and gas assets in Africa and Latin America. The Company was formed on May 18, 2006, by Certificate of Incorporation and Notice of Articles pursuant to the provisions of the Business Corporations Act (British Columbia). The Company's principal and executive office is located at Suite 650, 669 Howe Street, Vancouver, BC, Canada V6C 0B4. The Company's shares are trading on NEX under the trading symbol CE.H.

On March 11, 2020, there was a global outbreak of COVID-19 (coronavirus), which has had a significant impact on businesses through the restrictions put in place by the Canadian, provincial and municipal governments regarding travel, business operations and isolation/quarantine orders. It is still unknown the extent of the impact the COVID-19 outbreak may have on the Company as this will depend on continuing developments that are highly uncertain and that cannot be predicted with confidence. While the extent of the impact is unknown, we anticipate this outbreak may continue to cause staff shortages and increased government regulations, all of which may negatively impact the Company's business and financial condition.

For the period ended January 31, 2022, the Company used cash in operating activities of (840,006) (2020: $272,604) and as at January 31, 2022 had a working capital deficiency of $181,793 (2020: deficiency of $19,446). Because the Company does not generate cash flows from operations it has relied principally upon the issuance of securities to fund its activities to date. On June 24, 2021, the Company closed a non-brokered private placement of 7,062,000 units of the Company for gross proceeds of $882,750. On January 31, 2022, the Company closed a non-brokered private placement of 5,052,500 units of the Company for gross proceeds of $404,200. While management expects the proceeds from the private placement to enable the Company to continue in operations for at least twelve months from January 31, 2022, additional financing will need to be raised to continue in operations thereafter. There can be no assurance that such future funding will be available to the Company.

During the period ended January 31, 2022, the Company has been the victim of a phishing financial fraud perpetrated by professional hackers in a very sophisticated scheme. The crime resulted in the loss of $255,543 from the Company's bank accounts. The commercial bank is currently conducting a forensic accounting audit and is trying to recover a portion or all of the funds. Due to the sophisticated nature of the theft, these efforts may not bear any favorable results. Police have been notified and are currently investigating the theft. On October 26, 2021, $27,341 was recovered.

2. Significant accounting policies

Basis of presentation

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended April 30, 2021, which have been prepared in accordance with IFRS as issued by the IASB.

These unaudited condensed interim consolidated financial statements were authorized for issuance by the Board of Directors of the Company on March 28, 2022.

Basis of consolidation

The condensed consolidated interim financial statements include the accounts of the Company and its wholly-owned subsidiary, Hudson's Hope Gas, Ltd. ("HHG"). Control exists when the Company has the power over its subsidiaries, exposure or right, to variable returns from its involvement with the subsidiary, and the ability to use its power over the subsidiary to affect the amount of the subsidiaries return. Control of HHG was obtained effective June 26, 2012 when the Company acquired all of the outstanding shares of HHG. All intercompany balances and transactions, income and expenses have been eliminated upon consolidation.

3. Reclamation deposit

The Company has reclamation deposits totaling $87,859 (2021: $87,859) that is held by the British Columbia Oil and Gas Commission ("BCOGC") as a financial guarantee of the abandonment costs for the Company's wells and gas processing plant and its water disposal well. This entire amount is related to the plug and abandonment program that is near completion (2021: $33,583). During the period ended January 31, 2022, the Company redeemed $Nil (2021: $171,074) of its reclamation deposit to fund its plug and abandonment program.

4. Oil and gas interest

On September 22, 2021 the Company announced that it has executed a non-binding Letter of Intent with the Government of Gabon, West Africa. Both parties have entered negotiations to conclude a binding Profit-Sharing Agreement between CEP and the Government for the re-development of the Konzi Oil field located 9 kilometres off the coast of Gabon, close to the oil terminal and loading facilities at Port Gentil, Gabon.

The Konzi Oil project is a former producing asset of TotalEnergies in Gabon which was taken offline due to pipeline constraints imposed by the Gabon Oil Company's Mboumba field located on-shore, near the Konzi oil field. The pipeline capacity restraints have been resolved and capacity has been allocated to production from the region. During its production life Konzi produced more than 18 million barrels of light (API 29) oil from 14 wells on two shallow water platforms. Konzi's production was 600 barrels of oil per day when operations were halted.

CEP plans, upon a successful negotiation of a Profit-Sharing Agreement with the government of Gabon, to upgrade the facilities and production equipment, rework three wells and get meaningful production online as soon as possible. Based on the Company's initial due diligence, reserves and recovery of identified economic resources can be greatly enhanced with the use of modern oil and gas production techniques and equipment.

CEP has commissioned McDaniel & Associates from Calgary, Alberta, Canada to produce a National Instrument 53- 101 Reserve report containing a development plan and an estimate of the economics for the project.

4. Oil and gas interest (continued)

Water Disposal Well

On March 16, 2017, the Company received a General Order from the British Columbia Oil and Gas Commission ("BCOGC" or the "Commission") ordering a suspension of all disposal activities at the water disposal well. The order was to remain in effect until amended or terminated in whole or in part by the Commission and was pending a review of additional technical information. The Company immediately ceased disposing and secured the well at that time. The Company made a submission under the appeal procedures to the Oil & Gas Appeal Tribunal of British Columbia and received a decision on August 21, 2017, which dismissed the Company's appeal.

As at April 30, 2017, the Company evaluated the carrying amount recorded for the water disposal well. Due to the uncertainty of future operations or other forms of realizing value from the water disposal well, the Company determined that impairment indicators were present and, as such, wrote down the carry value of the water disposal well to $Nil by recording an impairment charge of $1,773,266. In the event that the Company does receive a positive outcome from its water disposal well appeal the Company will determine whether a recovery of the impairment to the water disposal well can be recorded in the Statement of income (loss) and comprehensive income (loss).

On December 6, 2017, the Company announced that it has received a decision from the BCOGC that will allow resumption of water disposal if certain conditions are met. The additional conditions are: (1) daily disposal volumes are limited to 200 cubic meters per day; (2) installation of seismic detection and accelerometer equipment with regular reporting of gathered data; and (3) a requirement to cease disposal if BC Hydro's safety factor at the Peace Canyon Dam falls below an acceptable level.

These conditions are required to be met under the BCOGC supervision and monitoring in order to recommence activities at the water disposal well. At this time, these conditions have not been met and there is uncertainty around the ability to meet the conditions, therefore no reversal of impairment was identified related to recommencing operations.

During the period ended January 31, 2022, the Company completed the process to plug and abandon the disposal well and is now disposing on-site surface equipment.

Letters of Intent with Properties in Gabon

On March 21, 2022, the Company announced that i has negotiated and signed two separate Letters of Intent, one with a private oil company based in the UK and the second with a private, domestic oil producer based in Gabon, West Africa.

The first Letter of Intent provides for the Company to acquire a 1.69% interest in a 166.7 KM2prospective licensed property. Within the licensed property there are 7 identified assets, of which 4are onshore and 3 offshore in shallow water. The second Letter of Intent provides for the Companyto acquire a 38.31% interest in the largest of the 7 identified assets. Ultimately, the Company willacquire a total of 40% interest in the largest onshore asset.

The Letter of Intent with the domestic oil producer based in Gabon requires the Company to makecash payments in the aggregate amount of US$2,500,000. The Company will commit to a capitalexpenditure program of US$7,000,000 to begin as soon as approvals and due diligence reviewshave been completed. The capital commitments will fund the drilling of two horizontal wells on theasset where a previously drilled well was successfully tested before being shut in. The Letter of Intent with the UK company requires the Companhy to make a cash payment of US$2,000,000 and royalty payments to commence 6 months after commercial production begins of $4,000,000 over 4 years.

(Unaudited)

5. Decommissioning liability

Total future decommissioning liability was estimated by management based on the Company's working interest in its wells and facilities, estimated costs to remediate, reclaim, and abandon the wells and facilities, and the estimated timing of the costs to be incurred in future periods. The Company estimated the remaining risk adjusted undiscounted amount of cash flows required to settle the decommissioning liability to be $62,299 which is related to the water disposal well and is expected to be incurred within the next year. To calculate the net present value of its decommissioning liability, the Company used a risk-free interest rate of 0.30% (2020: 1.50%). The following table summarizes the Company's decommissioning liability:

	Decommissioningliability
Balance, as at April 30, 2020	234,267
Reclamation spending	(126,429)
Change in estimate	(46,535)
Accretion expense	996
Reclassified as current decommissioning liability	(62,299)
Balance, as at January 31, 2021, April 30, 2021 and January 31, 2022	-

The present value of the reclamation liability may be subject to change in future periods. Such changes will be recorded in the accounts of the Company as they occur.

During the year ended April 30, 2021, the Company incurred $166,886 (2020: $7,000) related to its plug and abandonment program. Out of this amount $40,457 was related to current decommissioning liability recorded as at April 30, 2020. The remaining $126,429 was spent during the year directly reducing long term decommissioning liabilities.

As at January 31, 2022, the remaining balance of decommissioning liability was $62,299 which was classified as current given the Company's plan to complete the abandonment project within the next 12 months.

6. Share capital and share-based payment reserve

On January 31, 2022, the Company closed a non-brokered private placement of 5,052,500 units of the Company at a purchase price of $0.08 per unit for gross proceeds of $404,200. Each unit consists of a common share and one nontransferrable common share purchase warrant. Each warrant entitles the holder to acquuire one common share at an exercise price of $0.12 until January 31, 2023. The Company paid a cash commission of $28,336 and issued 309,200 non-transferrable finders' warrants with an exercise price of $0.12 until January 31, 2023.

On June 24, 2021, the Company closed a non-brokered private placement of 7,062,000 units of the Company at a purchase price of $0.125 per unit for gross proceeds of $882,750. Each unit consists of one common share and one non-transferable common share purchase warrant. Each warrant entitles the holder to acquire one common share at an exercise price of $0.16 until June 24, 2022. The Company paid cash finders' fees of $64,620 and issued 516,960 non-transferable finders' warrants with an exercise price of $0.16 until June 24, 2022.

On January 5, 2021, the Company closed its non-brokered private placement of 980,000 units of the Company (each, a "Unit"), at a purchase price of $0.125 per Unit, for gross proceeds of $122,500. Each Unit consists of one common share of the Company and one non-transferable common share purchase warrant (each, a "Warrant"). Each Warrant entitles the holder to acquire one additional common share in the capital of the Company (each, a "Warrant Share") at an exercise price of $0.16 per Warrant Share until January 5, 2022.

6. Share capital and share-based payment reserve (continued)

On September 30, 2020, the Company completed a non-brokered private placement 3,500,000 units of the Company at a purchase price of $0.125 per Unit, for gross proceeds of $437,500. Each Unit consists of one common share of the Company and one non-transferable common share purchase warrant. Each Warrant entitles the holder to acquire one additional common share in the capital of the Company at an exercise price of $0.16 per Warrant Share until September 30, 2021. The Company incurred share issuance cost of $52,310 in connection with this financing.

On July 31, 2020, the shareholders voted in favor of a 25:1 share consolidation. These financial statements, including all comparative data have been adjusted to reflect this change.

Share options and share-based compensation

The Company grants stock options in accordance with the requirements of the TSX Venture Exchange. Under the Company's stock option plan, up to 10% of outstanding common shares are reserved for the issuance of stock options to directors, officers, employees and consultants. The terms of the options, including the vesting terms and the exercise price, are fixed by the directors at the time of grant, subject to the price not being less than the market price of the Company's stock on the date of grant. The stock options granted are exercisable for a period of five years.

There were no options granted during the period ended January 31, 2022, and April 30, 2021.

Warrants

	Number ofWarrants	Weighted AverageExercise Price ($)
Balance, April 30, 2020	-	-
Issued(note 6(ii)(iv))	2,240,000	0.16
Balance, January 31, 2021	2,240,000	0.16
Balance, April 30, 2021	4,480,000	0.16
Issued	12,940,660	0.14
Expired	(4,480,000)	0.16
Balance, January 31, 2022	12,940,660	0.14

7. Related party transactions

A number of key management personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of those entities. Certain of these entities transacted with the Company during the reporting period.

Key Management and Personnel Compensation

During the three and nine months January 31, 2022, the Company paid $30,000 and $90,000, respectively (three and nine months ended January 31, 2021: $30,000 and $40,000, respectively) to an officer and a director of the Company for consulting services rendered. As at January 31, 2022, $Nil related to such fees remains unpaid in accounts payable and accrued liabilities. Additionally, prepaids and deposits include $18,388 of advances paid to this related party for travel and other expenses (April 30, 2021: $5,000).

Notes to Condensed Interim Consolidated Consolidated Financial Statements January 31, 2022 (Expressed in Canadian Dollars) (Unaudited)

8. Financial instruments and risk management

Fair value

The fair value of the Company's financial instruments and financial liabilities is approximated by their carrying value as at January 31, 2022 due to their short term-nature.

Credit risk

Credit risk is the risk of loss associated with a counter-party's inability to fulfill its payment obligations. Financial instruments that potentially subject the Company to credit risk consist primarily of cash and accounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets.

The Company reduces its credit risk by maintaining its bank accounts at highly rated international financial institutions. The credit risk on these amounts is minimal.

Foreign Exchange Risk

The Company incurs operating expenses and capital expenditures mostly in Canadian dollars. The Company's exposure to assets and liabilities denominated in foreign currencies is minimal. Accordingly, the Company is subject to foreign currency fluctuations primarily on its cash and accounts payable and accrued liabilities denominated in a currency other than Canadian dollars.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. The key to success in managing liquidity is the degree of certainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.

The Company endeavors to ensure that it has sufficient cash on demand to meet its obligations as they become due by preparing annual capital and administrative expenditure budgets, which are regularly monitored and updated as considered necessary. Further, the Company utilizes authorizations for expenditures on exploration projects to further manage expenditure. The Company monitors its risk of shortage of funds by monitoring the maturity dates of existing trade and other accounts payable. Most of the Company's financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms.

As at January 31, 2022, the Company had a cash balance of $402,504 (April 30, 2021: $68,875) to settle current financial liabilities of $386,128 (April 30, 2021: $369,209).

The following are the contractual maturities of financial liabilities at January 31, 2022:

	2 - 5 years
	Less than 1 year			year		Thereafter	Total
Accounts payable and accrued liabilities	$	323,829	$	-	$	-	$323,829

The following are the contractual maturities of financial liabilities at April 30, 2021:

	2 - 5 years
	Less than 1 year			year		Thereafter	Total
Accounts payable and accrued liabilities	$	306,910	$	-	$	-	$306,910

9. Segmented information

A reporting segment is defined as a component of the Company that:

• Engages in business activities from which it may earn revenues and incur expenses
• Operating results are reviewed regularly by the entity's chief operating decision maker; and
• Discrete financial information is available

The Company has determined that it operates its business in one geographic segment as substantially, all of the Company's operations are located in Canada.

10. Capital disclosure

The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to pursue exploration and maintain a flexible capital structure. The capital structure of the Company consists of equity attributable to common shareholders, which consists of issued capital, share-based payment reserve, and deficit. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets.

The Company currently does not produce any revenue and has relied on equity issuance and advances from related parties to fund its operations and expects continued financial support through the next twelve months.

The Company is currently not subject to externally imposed capital requirements.

11. Subsequent event

On March 21, 2022, the Company announced that i has negotiated and signed two separate Letters of Intent, one with a private oil company based in the UK and the second with a private, domestic oil producer based in Gabon, West Africa.