CGX Energy Inc. (TSX-V – OYL) announced today the release of its unaudited consolidated financial results for the quarter ended June 30, 2013, together with its Management Discussion and Analysis. These documents will be posted on the Company’s website at www.cgxenergy.com and SEDAR at www.sedar.com.
Second Quarter 2013 Overview and Highlights
CGX Energy reported a net loss of loss of $8,548,852 or $0.13 per share for the three month period ended June 30, 2013, compared with a net loss of $94,093,285 or $2.88 a share for the same period in 2012.
Cost Cutting Initiatives: With the exception of items relating to the special committee process that was undertaken and the change of control payments made due to the investment by Pacific Rubiales Energy Corp. (“Pacific Rubiales”), the Company’s general and administration costs decreased in the second quarter due to a reduction in all non-essential purchases and travel. The Company will continue to evaluate further cost cutting initiatives and is determined to keep general and administrative costs at current or lower levels going forward. As at June 30, 2013, the Company’s working capital increased to $13,361,347 from a working capital deficiency of $12,650,761 as at December 31, 2012.
Private Placement Financing: On April 26, 2013, the Company closed a brokered private placement raising CDN $37,008,900 by issuing 37,008,900 post-consolidation units (the “Units”) at a price of CDN $1.00 per Unit. Each Unit was comprised of one post-consolidation common share in the capital of the Company and one post-consolidation common share purchase warrant. Each post-consolidation common share purchase warrant entitles the holder thereof to acquire one post-consolidation common share at any time until April 26, 2018 at an exercise price of CDN $1.70. In connection with the private placement, the Company’s board of directors and its senior management team have been changed.
Share Consolidation: At the Company’s Annual and Special Meeting of shareholders held on June 26, 2013, the shareholders approved a consolidation of its issued and outstanding common shares, warrants and options on a basis of 10 pre-consolidated shares, warrants or options for each post-consolidation share, warrant or option. On July 11, 2013, the Company filed articles of amendment to complete this consolidation.
Strategic Partners and New Initiatives: As of March 19, 2013 and effective December 31, 2012, an Independent Resources Evaluation was completed by DeGolyer and MacNaughton of Dallas, Texas, USA (the “D&M Report”). In the D&M Report, the total best estimate (P50) of Prospective Resources for six oil and gas prospects within the Corentyne PA are 779 MMbbl of oil, 743 MMbbl of condensate, 6,943 Bcf of sales gas plus 696 billion cubic feet of solution gas. The Company is now in the process of re-interpreting seismic data to define the next prospect to be drilled on the Corenytne PPL with the assistance of Pacific Rubiales and its technical staff. In the short term, the Company will likely require additional equity financing and will seek to widen its shareholder base with a view to longer term farm-out transactions to enhance shareholder value.
