CanAsia Energy Corp. (CEC:TSX.V) has announced the financial and operating results from the second quarter of 2023. The company filed its unaudited consolidated financial statements for the six month period ending with June 30, 2023. Copies of these documents are available on the company's website, www.canasiacorp.com.
According to President and CEO Jeff Chisholm, "Second quarter activities were focused mainly on a number of items related to the Sawn Lake joint venture. Andora received a summary judgment in its favor for the payment of $200,000 for a portion of the amounts owing by its Sawn Lake partners. Actions enforcing this judgement are currently underway. The Company still anticipates an onshore Thailand licensing round to be announced in 2023, shortly after the appointment of a prime minister and formation of a new cabinet in Thailand."
The highlights of the results are as follows:
- CanAsia had working capital totaling CA$2.4 million, the company had no long-term debt and shareholder's equity of CA$1.5 million as of June 30, 2023.
- Common shares outstanding were 49.8 million as of August 1, 2023 and June 30, 2023.
- Net loss attributable to common shareholders for the second quarter of 2023 was CA$0.7 million at CA$0.01 per share, compared to CA$1.3 million at CA$0.03 per share in the first quarter. Cash flow used in operations was CA$1.1 million at CA$0.02 per share compared to CA$84 thousand in the first quarter.
- General and administrative expense in the second quarter of 2023 was CA$480 thousand compared to CA$529 thousand in the first quarter, and was mostly comprised of expenses related to personnel and premises, external services, and public company costs.
- Operating expenses in the second quarter of 2023 were CA$145 thousand compared to CA$90 thousand in the first quarter. These were incurred to safeguard and maintain the assets of the suspended Steam Assisted Gravity Drainage project facility and CanAsia's 100% owned subsidiary Andora Energy Corporation at Sawn Lake Central.
- The natural gas pipeline tariff agreement which was entered into between Andora and a third party in 2018 with a commencement date of May 1, 2023 is considered an onerous contract as of March 31, 2023 under IAS 37 since the operation at Sawn Lake is shut-in. The company has recognized a provision of CA$0.9 million representing the net cost of fulfilling the contract.
- The current portion of the decommissioning provision of CA$1.0 million as at June 30, 2023 relates to the legacy subsidiaries of CanAsia's 100% owned subsidiary Pan Orient Energy Holdings Ltd. which held interests in the East Jabung and Jambi Production Sharing Contracts in Indonesia and a well pertaining to Andora's interests in Sawn Lake, Alberta. CanAsia is withdrawing from activities in Indonesia and decommissioning related costs are expensed when incurred. The non-current portion of the decommissioning provision of CA$1.4 million as of June 30, 2023 pertained to Andora's interests in Sawn Lake, Alberta.
- In February 2023, Andora sold equipment to a third party for CA$100 thousand. The sale resulted in a gain on the sale of CA$100 thousand.
- On February 28, 2023, the board of directors of Andora accepted a formal proposal made by CanAsia with respect to a transaction whereby the outstanding shares of Andora were consolidated, and all fractional shares resulting from the consolidation were redeemed by Andora and cancelled, and the holders thereof would be entitled to receive a cash redemption payment of CA$0.044 for each pre-consolidation share of Andora. As part of the transaction all issued and outstanding options to acquire shares of Andora were surrendered for their "in the money" value.
- The Andora transaction was approved by shareholders on March 27, 2023.
- Consideration paid for redeeming fractional shares pursuant to the Andora transaction amounted to CA$1.24 million.
Oil Prices on the Rise
The oil and gas industry is still experiencing high demand as a result of global tensions and destabilization. The Biden administration recently pulled an offer to buy 6 million barrels of oil for the Strategic Petroleum Reserve after prices rose to US$80 per barrel. Oil prices are expected to rise further, as Saudia Arabia has announced that it has committed to cutting production by a million barrels a day this month in addition to cuts by other OPEC+ countries.
An Attractive Investment
Bill Newman of Research Capital Corp. rated CanAsia as a speculative buy for investors, commenting that "the after-tax net present value discounted at 15% of this resource will change to CA$198 million (CA$198M), or CA$3.98 per share, previously CA$175M, or CA$3.51 per share." Additionally, the company released a contingent resource report for the Sawn Lake asset in Alberta, detailing a three stage plan for the property.
Ownership and Share Structure
According to Reuters, Management and insiders own 8.75% of the company. Jeffery C. Chisholm owns 3.61% with 1.80 million shares, Joseph Gerald Macey owns 2.89% with 1.44 million shares, John Michael Hibberd owns 0.84% with 0.42 million shares, Cameron Wesley Taylor owns 0.83% with 0.41 million shares, Richard M. Alexander owns 0.50% with 0.25 million shares, and William Ostlund owns 0.08% with 0.04 million shares.
Reuters reports that institutional investors own 12.98% of the company. Gulf Overseas Investment Trading Corp owns 12.47% with 6.21 million shares, and LSV Asset Management owns 0.51% with 0.25 million shares.
There are 49.79 million shares outstanding, with 39.23 million free float traded shares. There is a market cap of CA$4.85 million. It trades in the 52 week period between CA$0.12 and CA$1.24.
Important Disclosures:
- Amanda Duvall wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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