CRITERIUM ENERGY LTD.
Interim Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024
(Expressed in Canadian Dollars)
(Unaudited)
CRITERIUM ENERGY LTD.
Interim Condensed Consolidated Statement of Loss and Comprehensive Loss | ||||
(unaudited) | ||||
For the Three Months | ||||
Ended March 31 | ||||
(thousands of Canadian Dollars) | 2024 | 2023 | ||
Revenue | ||||
Oil sales | $ | 8,165 | $ | - |
Royalty expense | (2,154) | - | ||
Royalty revenue | 13 | 29 | ||
Other income | 41 | 1 | ||
6,065 | 30 | |||
Expenses and other items | ||||
Operating | 3,894 | 5 | ||
General and administrative | 1,662 | 523 | ||
Depreciation and depletion (Note 9, 10) | 1,851 | 9 | ||
Financing costs (Note 16) | 953 | 6 | ||
Foreign exchange (gain)/loss | (75) | 6 | ||
Exploration | - | 32 | ||
Share-based compensation (Note 14) | 42 | 74 | ||
Transaction costs | 38 | - | ||
8,365 | 655 | |||
Net loss for the period before income taxes | (2,300) | (625) | ||
Current income taxes (Note 12) | 706 | - | ||
Deferred income taxes (recovery) | (593) | - | ||
Income taxes | 113 | - | ||
Net loss | (2,413) | (625) | ||
Other comprehensive income (loss), net of income tax | ||||
Items that recycle through net income | ||||
Foreign currency translation adjustment | 40 | (5) | ||
Total comprehensive loss | $ | (2,373) | $ | (630) |
Net loss per share | ||||
Basic and diluted | $ | (0.02) | $ | (0.02) |
Weighted average number of shares outstanding (thousands) (Note 14) | 132,831 | 36,431 |
See accompanying notes to the interim condensed consolidated financial statements.
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CRITERIUM ENERGY LTD.
Interim Condensed Consolidated Statement of Financial Position (unaudited)
As at
March 31 December 31
(thousands of Canadian Dollars)20242023
Assets
Current assets | ||||
Cash and cash equivalents | $ | 8,529 | $ | 443 |
Accounts receivable (Note 5) | 3,340 | 64 | ||
Prepaids and deposits (Note 6) | 1,481 | 336 | ||
Inventories (Note 7) | 1,942 | - | ||
Assets held for sale (Note 8) | 2,234 | 2,177 | ||
Subscription receipts (Note 14) | - | 6,739 | ||
17,526 | 9,759 | |||
Non-current assets | ||||
Property, plant and equipment (Note 9) | 74,551 | - | ||
Right of use assets (Note 10) | 668 | 122 | ||
VAT receivable - non-current portion | 7,473 | - | ||
Decommissioning and reclamation deposits (Note 13) | 3,397 | 46 | ||
Deposits (Note 6) | - | 265 | ||
$ | 103,615 | $ | 10,192 | |
Liabilities and Shareholders' Equity | ||||
Current liabilities | ||||
Accounts payable and accrued liabilities | $ | 6,262 | $ | 1,220 |
Current portion of debt (Note 11) | 6,223 | - | ||
Current portion of taxes payable (Note 12) | 7,743 | - | ||
Liabilities directly associated with assets held for sale (Note 8) | 674 | 657 | ||
Current portion of lease liabilities (Note 10) | 487 | 28 | ||
Subscription receipts (Note 14) | - | 6,739 | ||
Acquisition payable | - | 397 | ||
Decommissioning liabilities (Note 13) | 31 | 31 | ||
21,420 | 9,073 | |||
Long-term debt (Note 11) | 32,999 | - | ||
Taxes payable - non-current (Note 12) | 13,896 | - | ||
Deferred tax liabilities | 16,353 | - | ||
Contingent consideration (Note 20) | 7,432 | - | ||
Decommissioning obligations (Note 13) | 1,684 | - | ||
Provision for employee benefits | 1,653 | - | ||
Lease liabilities (Note 10) | 329 | 108 | ||
95,766 | 9,181 | |||
Shareholders' equity (Note 14) | ||||
Share capital | 17,863 | 8,694 | ||
Contributed surplus (Note 15) | 724 | 682 | ||
Deficit | (10,742) | (8,329) | ||
Accumulated other comprehensive income (loss) | 4 | (36) | ||
7,849 | 1,011 | |||
$ | 103,615 | $ | 10,192 |
See accompanying notes to the interim condensed consolidated financial statements.
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CRITERIUM ENERGY LTD.
Interim Condensed Consolidated Statement of Cash Flows | ||||
(unaudited) | ||||
For the Three Months | ||||
Ended March 31 | ||||
(thousands of Canadian Dollars) | 2024 | 2023 | ||
Operating activities: | ||||
Net loss | $ | (2,413) | $ | (625) |
Depletion and depreciation (Note 9, 10) | 1,851 | 9 | ||
Deferred income taxes (recovery) | (593) | - | ||
Finance cost - non-cash (Note 16) | 806 | 6 | ||
Unrealized foreign exchange | (53) | - | ||
Share-based compensation | 42 | 74 | ||
Change in non-cash working capital (Note 19) | (1,718) | (253) | ||
Net cash flows used in operating activities | (2,078) | (789) | ||
Financing activities: | ||||
Issuance of common shares, net of costs (Note 14) | 4,962 | 293 | ||
Principal payments on lease obligations (Note 10) | (12) | (12) | ||
Change in non-cash working capital (Note 19) | 280 | - | ||
Net cash flows from financing activities | 5,230 | 281 | ||
Investing activities: | ||||
Acquisition (Note 4) | (5,494) | - | ||
Cash on acquisition (Note 4) | 9,965 | - | ||
Change in non-cash working capital (Note 19) | 265 | (411) | ||
Net cash flows from (used in) investing activities | 4,736 | (411) | ||
Net change in cash and cash equivalents | 7,888 | (919) | ||
Effect of foreign exchange | 198 | - | ||
Cash and cash equivalents, beginning of period | 443 | 3,721 | ||
Cash and cash equivalents, end of period | $ | 8,529 | $ | 2,802 |
See accompanying notes to the condensed interim-consolidated financial statements.
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CRITERIUM ENERGY LTD.
Interim Condensed Consolidated Statement of Changes in Shareholders' Equity (unaudited)
Accumulated Other | ||||||
(thousands of Canadian Dollars | Share capital | Contributed | comprehensive | |||
thousands of shares) | # of Shares | $ | Surplus | income (loss) | Deficit | Total equity |
Balance, December 31, 2022 | 181,137 | 8,161 | 377 | (6) | (4,520) | 4,012 |
Exercise of warrants | 5,864 | 293 | - | - | - | 293 |
Stock-based compensation | - | - | 74 | - | - | 74 |
Other comprehensive loss | - | - | - | (5) | - | (5) |
Net loss | - | - | - | - | (625) | (625) |
Balance, March 31, 2023 | 187,001 | 8,454 | 451 | (11) | (5,145) | 3,749 |
Balance, December 31, 2023 | 38,390 | 8,694 | 682 | (36) | (8,329) | 1,011 |
Shares issued, net of share isuance costs (Note 14) | 60,909 | 4,962 | - | - | - | 4,962 |
Shares issued, Acquistion (Note 4) | 37,874 | 4,207 | - | - | - | 4,207 |
Stock-based compensation | - | - | 42 | - | - | 42 |
Other comprehensive income | - | - | - | 40 | - | 40 |
Net loss | - | - | - | - | (2,413) | (2,413) |
Balance, March 31, 2024 | 137,174 | 17,863 | 724 | 4 | (10,742) | 7,849 |
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CRITERIUM ENERGY LTD.
Notes to the Interim Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2024 and 2023
(tabular amounts in thousands of Canadian dollars, except share or per share amounts, unaudited)
-
Reporting Entity
Criterium Energy Ltd., ("Criterium" or the "Company") and its subsidiaries are currently engaged in the exploration, appraisal and development of petroleum and natural gas in Indonesia. Criterium was incorporated in Alberta, Canada and has subsidiaries in Bermuda, British Virgin Islands, Cyprus, Singapore and New Zealand. The Company changed its name to Criterium Energy Ltd. from Softrock Minerals Ltd. on September 26, 2022. Criterium is a public company with its shares traded on the TSX Venture Exchange. The registered and head office address of the Company is Suite 1120, 202 - 6th Ave SW, Calgary, Alberta T2P 2R9. - Basis of presentation Statement of compliance
These unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standards ("IAS 34") - Interim Financial Reporting of the International Financial Reporting Standards ("IFRS"). The attached unaudited interim condensed consolidated financial statements should be read in conjunction with Criterium's audited consolidated financial statements and MD&A for the year ended December 31, 2023. The unaudited interim condensed consolidated financial statements have been prepared in accordance with IFRS accounting policies and methods of computation as set forth in Criterium's audited consolidated financial statements for the year ended December 31, 2023, with the exception, as noted below, of certain disclosures that are normally required to be included in annual consolidated financial statements which have been condensed or omitted in the interim statements. In addition, accounting policies first applied during the reporting period have been disclosed under Note 3 Accounting Policies.
Certain comparative figures have been reclassified to conform with the presentation adopted in the current period.
The unaudited interim condensed consolidated financial statements were authorized for issue by the Board of Directors on May 29, 2024.
Going concern and liquidity risk
These interim condensed consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operations for the foreseeable future and will be able to realize its assets and discharge its obligations in the normal course of operations. The Company's ability to maintain its current level of operations is dependent on its ability to generate sufficient cash to fund its operations and future business plans.
The Company is dependent on its revenue from the sale of petroleum and natural gas from its Indonesian operations. This revenue stream is highly dependent on global commodity prices and exchange rates which are outside of the control of management. The volatility of commodity prices and capital markets will continue to have a significant impact on the Company's revenue and ability to access capital in the future. While Management believes the Company will have sufficient cash to discharge its obligations in the normal course of operations for the short-term, future operations will be dependent upon the raising of sufficient capital, the development of profitable operations and the corresponding generation of future cash flows.
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The Company has been successful to date in obtaining financing. However, there is no assurance that it will be able to generate sufficient cash flow or obtain adequate financing in the future or that such financing will be on terms acceptable to the Company. If the going concern assumption were not appropriate for the interim condensed consolidated financial statements, adjustments might be necessary to the carry value of assets and liabilities, reported revenues and expenses and the statement of financial position classifications used.
Estimation uncertainty
Management makes judgements and assumptions about the future in deriving estimates used in preparation of these interim condensed consolidated financial statements in accordance with IFRS. Sources of estimation uncertainty include estimates used to determine the values in the purchase price allocation for the business combination, economical viability of exploration and evaluation costs, the recoverable amount of long-lived assets or cash generating units ("GCUs"), the fair value of financial instruments, the provision for decommissioning liabilities, the provision for income taxes and the related deferred tax assets and liabilities, and the expenses recorded for stock-based compensation.
Basis of consolidation and functional and presentation currency
These interim condensed consolidated financial statements include the accounts of the Company and its subsidiaries, which are entities controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from the entity's activities. The financial statements of subsidiaries are included in the consolidated financial statements as at the date that control commences until the date that control ceases. If the Company's interest in a subsidiary that it has determined it controls, is less than 100%, the interest attributable to non-controlling shareholders is recognized as non-controlling interest.
When necessary, adjustments are made to the financial statements of subsidiaries to align their accounting policies with those of the Company.
These interim condensed consolidated financial statements are presented in Canadian dollars, which is the Company's functional currency. The functional currency of a subsidiary is the currency of the primary economic environment in which the subsidiary operates. Transactions denominated in a currency other than the functional currency are translated at the prevailing rates on the date of the transaction. Any monetary items held in a currency which is not the functional currency of the subsidiary are translated to the functional at the prevailing rate as the date of the statement of financial position. All exchange differences arising as a result of the translation to the functional currency of the subsidiary are recorded in earnings.
Translation of all assets and liabilities from the respective functional currencies to the reporting currency are performed using the rates prevailing at the statement of financial position date. The differences arising upon translation from the functional currency to the reporting currency are recorded as currency translation adjustments in other comprehensive income or loss ("OCI") and are held within accumulated other comprehensive income or loss ("AOCI") until a disposition or partial disposal of a subsidiary. A disposal or partial disposal will then give rise to a realized foreign exchange gain or loss which is recorded in earnings.
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At March 31, 2024, the Company's wholly-owned subsidiaries are as follows:
Country of | Principal | Functional | |
Entity | Incorporation | Activity | Currency |
Criterium Holdings Pte Ltd. | Singapore | Holding | US Dollar |
AWE Asia Limited | New Zealand | Holding | US Dollar |
AWE (Satria) NZ Limited | New Zealand | Operating | US Dollar |
Mont D'Or Petroleum Limited | British Virgin Islands | Holding | US Dollar |
Mont D'Or Ventures Limited | British Virgin Islands | Holding | US Dollar |
Mont D'Or Resources Limited | British Virgin Islands | Holding | US Dollar |
Fuel-X Tungkal Limited | Cyprus | Operating | US Dollar |
Mont D'Or Oil Tungkal Limited | Bermuda | Operating | US Dollar |
Mont D'Or Salawati Limited | British Virgin Islands | Operating | US Dollar |
- Accounting Policies
The accounting policies, critical accounting judgements and significant estimates used in these interim condensed consolidated financial statements are consistent with those used the preparation of the 2023 annual consolidated financial statements except as noted below.
Ammendments to IAS 1 Presentation of Financial Statements
In January 2020, the IASB issued amendments to IAS 1 Presentation of Financial Statements, to clarify its requirements for the presentation of liabilities as current or non-current in the statements of financial position and clarify its requirements for the disclosure of Accounting Policies. In October 2022, the IASB issued amendments to IAS 1, which specify the classification and disclosure of a liability with covenants. Both amendments were adopted on January 1, 2024. There was no material impact to the Company's financial statements. - Business Combinations
On January 4, 2024, the Company closed a Share and Purchase Agreement ("SPA") to acquire all issued and outstanding shares of Mont D'Or Petroleum Limited ("MOPL"), a private company with two on-shore Production Sharing Contracts ("PSCs") in Indonesia. The Company provided the following consideration in connection with the closing of the MOPL acquisition: - A US$1 cash payment to current MOPL shareholders;
- Issuance of 10,821,273 common shares at $0.11 per share to Tourmalet Holdings Ltd. ("Tourmalet") in satisfaction of the fee payable by MOPL to Tourmalet for support in connection with negotiating potential write-downs to current MOPL lenders;
- Issuance of 27,053,182 common shares in exchange for the retirement of US$2.25 million of debt,
along with the contingent payment rights to debt holders described in note 20.
- A contingent payment to MOPL shareholders with respect to future production in the event that oil prices, gas prices, and/or production volumes exceed minimum thresholds (see note 20 for details)
- Cash consideration to a debt holder to extinguish debt in the amount of US$4 million; and
- An initial deposit of US$0.1 million
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The acquisition established the Company as an operator in the Southeast Asia region, and provides a foundation for organic growth and asset consolidation in the region. The acquisition is a first step in Criterium's strategy of consolidating a balanced portfolio of producing assets with the opportunity to optimize production and conduct infill drilling and step-out development.
The SPA has been accounted for as a business combination under IFRS 3. The preliminary purchase price has been allocated based on the best information available as of January 4, 2024, is as follows:
Initial deposit | $ | 134 |
Cash consideration for debt reduction | 5,361 | |
Share consideration for debt reduction | 4,207 | |
MOPL contingent payments (note 20) | 3,422 | |
Contingent payment rights to debt holder | 3,275 | |
Total purchase price | $ | 16,399 |
Cash and cash equivalents | $ | 9,965 |
Inventory | 2,059 | |
Accounts receivable | 288 | |
Prepaids and deposits | 2,070 | |
VAT Receviable | 7,329 | |
Decommissioning and reclamation deposits | 3,297 | |
Property, Plant and Equipment | 75,088 | |
Right of use asset | 625 | |
Total Identifiable Assets | $ | 100,721 |
Accounts payable and accrued liabilities | $ | (4,130) |
Taxes payable - current | (8,121) | |
Current portion of long term debt | (6,123) | |
Current portion of lease liability | (399) | |
Contingent liability | (668) | |
Decommissioning liabilities | (1,552) | |
Long term taxes payable | (12,971) | |
Deferred tax liabilities | (16,675) | |
Long term debt | (31,830) | |
Provision for employee benefits | (1,629) | |
Lease liability | (224) | |
Total identifiable liabilites | $ | (84,322) |
Net identifiable assets | $ | 16,399 |
The identifiable assets and liabilities have been measured at their individual fair values on the date of acquisition. Determinations of fair value often require management to make assumptions and estimates about future events. The above preliminary purchase price allocation is based on management's best estimate at the time of the preparation of these financial statements. The purchase price allocation is not final as the Company is continuing to obtain and verify information required, including those from internal and external specialists, to determine the fair value of certain assets and liabilities including property, plant and equipment, decommissioning obligations, income taxes payable, long term debt and the deferred tax liability, as well as the finalization of working capital adjustments. Upon finalizing the value of the net assets acquired, liabilities assumed and total consideration adjustments may be required as values subject to estimate are finalized. As new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, then the accounting for the acquisition will be revised.
Income amounts included in the statement of profit and loss since the acquistion date are as follows:
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Revenue | ||
Oil sales | $ | 8,165 |
Royalty expense | (2,154) | |
6,011 | ||
Expenses and other items | ||
Operating | 3,894 | |
General and administrative | 1,254 | |
Depreciation, depletion | 1,841 | |
Financing costs | 791 | |
Foreign exchange (gain)/loss | (52) | |
7,728 | ||
Net loss for the period before income taxes | (1,717) | |
Current income taxes | 706 | |
Deferred income taxes (recovery) | (593) | |
Income taxes | 113 | |
Net Loss | (1,830) | |
Other comprehensive income, net of income tax | ||
Foreign currency translation adjustment | 41 | |
Total comprehensive loss | $ | (1,789) |
5. Accounts receivable
The Company's amounts receivable are non-interest bearing and generally on a 30-day payment term. The carry amounts presented are reasonable approximations of their fair market balance and are not past due or impaired. A breakdown is as follows:
March 31 | December 31 | |||
2024 | 2023 | |||
Trade receivables | $ | 3,095 | $ | 36 |
Other receivables | 245 | 28 | ||
$ | 3,340 | $ | 64 | |
6. Prepaids and deposits | ||||
March 31 | December 31 | |||
2024 | 2023 | |||
Deposits | $ | 842 | $ | 265 |
Prepaid expenses | 639 | 55 | ||
Prepaid share issuance costs | - | 281 | ||
$ | 1,481 | $ | 601 | |
Current | $ | 1,481 | $ | 336 |
Non Current | $ | - | $ | 265 |
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Criterium Energy Ltd. published this content on 08 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 June 2024 02:51:01 UTC.