East West Q3 Financial Results:
Symbol: EW.V (Canada) & EWPMF(USA)
Current Price: $0.06CAD & $0.048USD
Shares Outstanding: 89,585,665
Most Recent Financials (Ending December 31st 2020)
Financials
ASSETS
Cash: $5,877,142 – 6.6 cents a share
GST receivable: $7,303
Amounts Receivable: $86,347
Prepaid Expenses: $27,800
Investments: $36,100
Exploration & Evaluation Assets: $1,715,200
Property, Plant & Equipment: $318,147
Total Assets: $8,068,039
LIABILITIES
Accounts Payable: $482,967
Decommissioning: $1,368,938
Total Liabilities: $1,851,905
Quarterly Performance
Revenue: $469,380
Net Income: $89,569 – New Zealand production was down due to workovers. Profit came from one time asset sale of investments.
MD&A Highlights
New Zealand
The Company had previously agreed to sell its interest in PEP 54877 and PMP 60291 which comprise the majority of its New Zealand assets. The agreement was terminated by the Company on August 1, 2020. The Company is currently assessing its go-forward plans, which includes the possible sale of its New Zealand concessions to other buyers and ongoing discussions on the Teremia North Field in Romania, and whether its focus should remain on the oil and gas sector. At this time no decisions have been made but the Company will be assessing alternatives.
PMP 60291 is the location of the Cheal E-Site and the Cheal E-site production facility as well as the Cheal-E wells. A waterflood program is ongoing however the efficacy of the program and its impact on production is an ongoing item of debate. The Company’s technical advisors have stated that there is no unequivocal evidence that water injection through the Cheal-E7 well has had a significant impact on production from PNP 60291 but that there is evidence to the contrary. The Company’s advisors attribute the production performance to other factors than injection through the Cheal-E7 well. The determination whether the waterflood utilizing Cheal-E7 as the injector well is creating the positive response in production impacts the Company’s obligation to fund its 30% share of the costs of acquiring the Cheal-E7 well, being 30% of NZ $3,200,000. No funding will be advances until the issue is resolved.
The Company produces its oil and gas production from five wells on the Cheal-E site. On October 24, 2020 the ChealE1 pump stopped functioning due to downhole blockage and, as a result, production ceased from the Cheal-E1 well. As the major producing well, the stoppage of the Cheal-E1 well has had a major impact on the Company’s share of production for the three months ended December 31. 2020 (“Q3”) on which 5.3 Mbbl oil and 9.4 Mmcf gas was produced, compared to 13.8 Mbbl oil and 21.2 Mmcf gas produced during the three months ended September 30, 2020 (“Q2”), a decrease of 61.5%.
The Operator has managed to pull the rods out of the Cheal-E1 well with a crane, cleaned the well and replaced the pump. However, only limited production resumed in mid-January 2021 without annular flow. A workover of the Cheal-E1 well is planned for mid-May 2021 to restore the well to full production.
Romania
NIS will be funding 100% of the costs and fully carrying the Company through the commitment work programs in each of the blocks in return for earning an 85% interest in each licence. There have been several meetings of both the technical and operating committees to discuss work program results and determine whether the Teremia North field is a commercial discovery. Declaration of a commercial discovery will result in the Company being responsible for 15% of the development costs. At the operating committee meeting held February 8, 2021 NIS voted that there was a commercial discovery at Teremia North whereas the Company voted that there was not a commercial discovery. The field economics were, in the Company’s assessment, marginal and did not merit the significant capital contributions required. NIS, being a vertically integrated oil and gas producer, could support the development costs given the internal economies available. NIS has since advised that it will be proceeding with the development plans for Teremia North on an exclusive basis. There is some uncertainty as to whether the proposed development can be conducted as an exclusive operation and the Company is assessing what options are available and is in discussions with NIS in regard to such matters.
Given the project economics, the return on investment and the net present value the Company cannot justify contributing its 15% share of the estimated US $50,000,000 development costs. In the event NIS proceeds on an exclusive basis the Company will have no interest in the development lands that make up the Teremia North field. The Company will retain its carried interest in the balance of the exploration blocks.
Investments
On April 17, 2020 Orocobre Limited (“Orocobre”) completed the acquisition of 100% of the issued and outstanding common shares of Advantage Lithium Corp. (“Advantage Lithium”) in exchange for 0.142 ordinary shares of Orocobre per Advantage Lithium share. Accordingly, the Company received 244,098 shares of Orocobre for the 1,719,000 Advantage Lithium shares held by the Company for a fair value of $463,786, resulting in an initial loss on the disposition of $603,800. The Company subsequently sold all its common shares of Orocobre for proceeds of $885,356 resulting in a subsequent gain on sale of $421,569. In May 2020 Seaway Energy Services Inc. (“Seaway”) completed a consolidation of its share capital on a basis of, one new for every 2.5 old common shares and, on May 22, 2020, completed a reverse takeover transaction to form Sweet Earth Holdings Inc (“Sweet Earth”) resulting in the Company holding 204,960 Sweet Earth shares. The Company has subsequently sold 14,960 common shares of Sweet Earth for proceeds of $3,335 resulting in a loss on the sale of $30,191. As at December 31, 2020 the Company held 190,000 common shares of Sweet Earth with a total quoted value of $36,100.
Outstanding Share Data
The Company’s authorized share capital is unlimited common shares with no par value. As at February 26, 2021 there were 89,585,665 outstanding common shares and 5,455,000 share options outstanding with exercise prices ranging from $0.06 to $0.135 per share.
Symbol: EW.V (Canada) & EWPMF(USA)
Current Price: $0.06CAD & $0.048USD
Shares Outstanding: 89,585,665
Most Recent Financials (Ending December 31st 2020)
Financials
ASSETS
Cash: $5,877,142 – 6.6 cents a share
GST receivable: $7,303
Amounts Receivable: $86,347
Prepaid Expenses: $27,800
Investments: $36,100
Exploration & Evaluation Assets: $1,715,200
Property, Plant & Equipment: $318,147
Total Assets: $8,068,039
LIABILITIES
Accounts Payable: $482,967
Decommissioning: $1,368,938
Total Liabilities: $1,851,905
Quarterly Performance
Revenue: $469,380
Net Income: $89,569 – New Zealand production was down due to workovers. Profit came from one time asset sale of investments.
MD&A Highlights
New Zealand
The Company had previously agreed to sell its interest in PEP 54877 and PMP 60291 which comprise the majority of its New Zealand assets. The agreement was terminated by the Company on August 1, 2020. The Company is currently assessing its go-forward plans, which includes the possible sale of its New Zealand concessions to other buyers and ongoing discussions on the Teremia North Field in Romania, and whether its focus should remain on the oil and gas sector. At this time no decisions have been made but the Company will be assessing alternatives.
PMP 60291 is the location of the Cheal E-Site and the Cheal E-site production facility as well as the Cheal-E wells. A waterflood program is ongoing however the efficacy of the program and its impact on production is an ongoing item of debate. The Company’s technical advisors have stated that there is no unequivocal evidence that water injection through the Cheal-E7 well has had a significant impact on production from PNP 60291 but that there is evidence to the contrary. The Company’s advisors attribute the production performance to other factors than injection through the Cheal-E7 well. The determination whether the waterflood utilizing Cheal-E7 as the injector well is creating the positive response in production impacts the Company’s obligation to fund its 30% share of the costs of acquiring the Cheal-E7 well, being 30% of NZ $3,200,000. No funding will be advances until the issue is resolved.
The Company produces its oil and gas production from five wells on the Cheal-E site. On October 24, 2020 the ChealE1 pump stopped functioning due to downhole blockage and, as a result, production ceased from the Cheal-E1 well. As the major producing well, the stoppage of the Cheal-E1 well has had a major impact on the Company’s share of production for the three months ended December 31. 2020 (“Q3”) on which 5.3 Mbbl oil and 9.4 Mmcf gas was produced, compared to 13.8 Mbbl oil and 21.2 Mmcf gas produced during the three months ended September 30, 2020 (“Q2”), a decrease of 61.5%.
The Operator has managed to pull the rods out of the Cheal-E1 well with a crane, cleaned the well and replaced the pump. However, only limited production resumed in mid-January 2021 without annular flow. A workover of the Cheal-E1 well is planned for mid-May 2021 to restore the well to full production.
Romania
NIS will be funding 100% of the costs and fully carrying the Company through the commitment work programs in each of the blocks in return for earning an 85% interest in each licence. There have been several meetings of both the technical and operating committees to discuss work program results and determine whether the Teremia North field is a commercial discovery. Declaration of a commercial discovery will result in the Company being responsible for 15% of the development costs. At the operating committee meeting held February 8, 2021 NIS voted that there was a commercial discovery at Teremia North whereas the Company voted that there was not a commercial discovery. The field economics were, in the Company’s assessment, marginal and did not merit the significant capital contributions required. NIS, being a vertically integrated oil and gas producer, could support the development costs given the internal economies available. NIS has since advised that it will be proceeding with the development plans for Teremia North on an exclusive basis. There is some uncertainty as to whether the proposed development can be conducted as an exclusive operation and the Company is assessing what options are available and is in discussions with NIS in regard to such matters.
Given the project economics, the return on investment and the net present value the Company cannot justify contributing its 15% share of the estimated US $50,000,000 development costs. In the event NIS proceeds on an exclusive basis the Company will have no interest in the development lands that make up the Teremia North field. The Company will retain its carried interest in the balance of the exploration blocks.
Investments
On April 17, 2020 Orocobre Limited (“Orocobre”) completed the acquisition of 100% of the issued and outstanding common shares of Advantage Lithium Corp. (“Advantage Lithium”) in exchange for 0.142 ordinary shares of Orocobre per Advantage Lithium share. Accordingly, the Company received 244,098 shares of Orocobre for the 1,719,000 Advantage Lithium shares held by the Company for a fair value of $463,786, resulting in an initial loss on the disposition of $603,800. The Company subsequently sold all its common shares of Orocobre for proceeds of $885,356 resulting in a subsequent gain on sale of $421,569. In May 2020 Seaway Energy Services Inc. (“Seaway”) completed a consolidation of its share capital on a basis of, one new for every 2.5 old common shares and, on May 22, 2020, completed a reverse takeover transaction to form Sweet Earth Holdings Inc (“Sweet Earth”) resulting in the Company holding 204,960 Sweet Earth shares. The Company has subsequently sold 14,960 common shares of Sweet Earth for proceeds of $3,335 resulting in a loss on the sale of $30,191. As at December 31, 2020 the Company held 190,000 common shares of Sweet Earth with a total quoted value of $36,100.
Outstanding Share Data
The Company’s authorized share capital is unlimited common shares with no par value. As at February 26, 2021 there were 89,585,665 outstanding common shares and 5,455,000 share options outstanding with exercise prices ranging from $0.06 to $0.135 per share.
