CANASIA ENERGY CORP. – Financial and operating results for the third quarter of 2022

CALGARY, Alta., November 10, 2022 /CNW/ – CanAsia Energy Corp. (“CanAsia” or the “Company”) (TSXV:CEC) announces its consolidated financial and operating results for the third quarter of 2022.

CanAsia Logo (CNW Group/CanAsia Energy Corp.)

The Company today files its unaudited consolidated financial statements as of and for the three months ended September 30, 2022 and the period of May 27, 2022 (date of incorporation) at September 30, 2022 and management’s related discussions and analysis with Canadian securities regulators. Copies of these documents can be obtained online at www.sedar.com or the Company’s website, www.canasiacorp.com.

Commenting today on CanAsia’s third quarter 2022 results, the Chairman and Chief Executive Officer Jeff Chisholm said: “Third quarter activity was dominated by post-deal commitments to buyer Pan Orient Energy Corp. The remainder of 2022 will be focused on the long-lead elements required to restart production at the oil project. Sawn Lake Heavy Oil and As 2022 approaches year-end, the Company will focus on the steps necessary to optimize the ownership and restart of the Sawn Lake heavy oil asset and regular updates may be expected by CanAsia shareholders.”

STRONG POINTS

  • On August 25, 2022CanAsia completed the arrangement that resulted in Pan Orient Energy Corp. (“Pan East”) and its Thailand transactions acquired by a third party (the “Arrangement”). Canadian assets and abandoned assets Indonesia Pan Orient’s operations were transferred to CanAsia. Further details of the arrangement are described below. On August 25, 2022CanAsia is owned by former Pan Orient shareholders with 49,793,907 common shares outstanding.

    Under the terms of the arrangement entered into on August 25, 2022: (a) Berhad dialogue group of Malaysia acquired all of the issued and outstanding shares of Pan Orient and the shares of Pan Orient Thailand Company; (b) Pan Orient shareholders received, for each Pan Orient share held, a cash payment of USD $0.788 and one CanAsia share; and (c) CanAsia has become a public company whose shares are listed on the TSX Venture Exchange. Pan Orient transferred to CanAsia all of Pan Orient’s non-Thai assets, including Pan Orient’s 71.8% interest in Andora Energy Corporation (“Andora”), which holds interests in oil sands properties at Sawn Lake , in Alberta, convertible loans receivable from Andora, 100% interest in Pan Orient Energy Holdings Ltd. (“POEH”) with legacy subsidiaries that held interests in Indonesia, as well as working capital and non-current deposits. CanAsia assumed all liabilities related to the non-Thai business, consisting primarily of accounts payable and accrued liabilities included in working capital and decommissioning provisions.

  • CanAsia had working capital and non-current deposits of $6.9 million and no long-term debt as of September 30, 2022.

  • Common shares outstanding were 49.8 million as of November 8, 2022 and September 30, 2022.

  • Net income attributable to common shareholders for the third quarter of 2022 and the period from May 27, 2022 (date of incorporation) to September 30, 2022 was $55,000 ($0.00 per share). Cash flow used in operations during both periods was $103,000 ($0.00 per share). The financial results as of September 30, 2022 correspond to the completion of the Arrangement on August 25, 2022 and the 37-day period from August 25 to September 30, 2022.

  • General and administrative expenses of $217,000 for the three-month period ending September 30, 2022 and the period from May 27, 2022 to September 30, 2022 consisted mainly of personnel and premises expenses, external services, public companies and no charge for increasing cash.

  • Operating expenses of $36,000 during the three-month period ending September 30, 2022 and the period May 27, 2022 to September 30, 2022 were incurred for the installation of the suspended Andora demonstration project and the pair of wells at Sawn Lake Central to protect and maintain the assets.

  • Pursuant to the arrangement, CanAsia assumed from Pan Orient two convertible loan agreements with Andora on August 25, 2022. Under the agreements, Andora may draw up to $2.5 million under a revolving credit facility ( the “First Credit Facility”) and up to $1.3 million on the second revolving credit facility (the “Second Credit Facility”). The loans bear interest at HSBC Canada’s prime rate for Canadian dollar commercial loans plus 3% per annum. Any principal drawn on the respective credit facilities, including accrued interest (collectively, the “Outstanding Amount”), is repayable on demand by CanAsia or by December 31, 2022, whichever comes first. Security for the reimbursement of any unpaid amounts is provided by a general security agreement creating a first fixed charge on the entire property of Andora, subject to certain permitted charges. CanAsia has the option to convert the outstanding amounts, or a portion thereof, into common shares of Andora, at a price of $0.15 per share under the first credit facility and at a price of 0 $.01 per share under the second credit facility.

    As of September 30, 2022, a total of $2.5 million had been drawn on the first credit facility and $1.2 million had been drawn on the second credit facility. The amounts owed by Andora are not expected to be collected in the foreseeable future.

  • The current portion of the decommissioning provision of $1.0 million as of September 30, 2022 relates to POEH together with its former subsidiaries which held interests in the East Jabung and Jambi production sharing contracts in Indonesia. CanAsia is exiting operations in Indonesia and decommissioning costs are expensed as incurred. The non-current portion of provisions for dismantling of $1.4 million as of September 30, 2022 related to Andora activities.

OUTLOOK

The remainder of 2022 will be focused on the long-lead elements required for the restart of production from the Sawn Lake heavy oil project and the business activities related to Sawn Lake. As year-end 2022 approaches, the Company will focus on the steps necessary to optimize the ownership and restart of the Sawn Lake heavy oil asset.

COVID-19 and the invasion of Ukraine

Events such as the Covid-19 pandemic and the invasion of Ukraine by Russian forces have resulted in significant disruption to business operations and a significant increase in economic uncertainty, with more volatile commodity prices, exchange rates and interest rates, and rising inflation rates . These events have led to a difficult economic climate in which it is difficult to reliably estimate the duration or severity of these developments and their financial impact. These events and any resulting potential direct and indirect impact on the Company have been taken into account in the management estimates described above at the end of the period; however, there may be another material prospective impact in future periods.

Climate change and environment, social and governance (“ESG”)

Climate change and ESG culture policies are evolving at regional, national and international levels. Political and economic events can significantly affect the scope and timing of ESG policies and measures to combat climate change. The International Sustainability Standards Board has published an IFRS Sustainability Reporting Standard with the aim of developing sustainability reporting standards that are globally consistent, comparable and reliable. In addition, the Canadian Securities Administrators have published draft National Instrument 51-107 on disclosure of climate-related matters.

The direct or indirect costs of compliance with greenhouse gas regulations and ESG guidelines may have an adverse effect on the business, financial condition, results of operations and prospects of the Company and its customers; however, at present, these costs have not yet been quantified.

Financial and operating results

Three months
Ended

September 30,

Period of

May 27, 2022 (date
of incorporation) to

September 30,

(in thousands of Canadian dollars unless otherwise indicated)

2022

2022

FINANCIAL (note 1)

Financial statement results

Net income attributable to common shareholders

55

55

Per share – basic and diluted

$0.00

$0.00

Cash flows used in operating activities (note 2)

(103)

(103)

Per share – basic and diluted

$(0.00)

$(0.00)

Cash flow from financing activities (note 2)

9,319

9,319

Per share – basic and diluted

$0.19

$0.19

Working capital and non-current deposits

6,927

6,927

long-term debt

Shares outstanding (thousands)

49,794

49,794

General and administrative costs

(217)

(217)

Exploitation charges

(36)

(36)

Stock-based compensation

(3)

(3)

Amortization

(4)

(4)

Dismantling recovery

73

73

Financial products

seven

seven

Exchange rate gain

308

308

Deferred tax charge

(90)

(90)

Net loss attributable to non-controlling interest in Andora

17

17

Net income attributable to common shareholders

55

55

(1) The financial results as of September 30, 2022 correspond to the completion of the Arrangement on August 25, 2022 and the 37-day period from August 25 to September 30, 2022.

(2) As disclosed in the Consolidated Statements of Cash Flows of CanAsia’s Consolidated Financial Statements.

Warnings

This press release may contain forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as “will”, “expects”, “believes”, “estimates”, “should”, “anticipates”, “potential”, “opportunity” or other similar formulations.

By its very nature, forward-looking information requires CanAsia and its management to make assumptions which may not materialize or which may not be accurate. Further, forward-looking information is subject to known and unknown risks and uncertainties and other factors, some of which are beyond CanAsia’s control, which could cause actual events, results, expectations, achievements or performance to differ. noticeably. Although CanAsia believes that the expectations reflected in its forward-looking information are reasonable, it cannot guarantee that such expectations will prove to be correct. CanAsia undertakes no obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE CanAsia Energy Corp.

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