The first half of 2022 has turned out to be another losing period for CGX Energy Inc. which holds a working interest in the Corentyne Block offshore Guyana. Today, the company informed the market that it recorded a net and comprehensive loss of US$6.8M or US$0.02 per share for the six-month period ended June 30, 2022, compared with a net loss of US$3.4M or US$0.01 per share for the same period in 2021.
CGX said its net loss for the period is consistent with prior periods as expected. Expounding on this front, it said interest expense increased by US$2,262,700 to US$2,638,308 in the six month period ended June 30, 2022 from US$375,608 for the same period in 2021.
CGX said the increase in interest expense was due to the interest incurred, amortization of loan costs and amortization of an equity component of a 2021 Convertible Loan and the 2022 Convertible Loan it has with joint venture partner Frontera Energy Corporation.
It said too that general and administrative costs increased by US$325,712 to US$1,319,419 in the six month period ended June 30, 2022 from US$993,707 for the same period in 2021, due to increased business development costs.
Financial statements also state that the company has a history of operating losses and as at June 30, 2022, had a working capital deficiency of US$83,478,546 and an accumulated deficit of US$317,364,980.
In fact, CGX said the ability of the company to continue as a going concern is dependent on securing additional required financing through issuing additional equity or debt instruments, the sale of company assets, securing a joint farm-out for its Petroleum Production Licences (PPLs), or securing a partner for the deepwater port project.
To date, the company has lost its hold on the Demerara and Berbice blocks. Both concessions have been returned to the State. CGX’s last hope is the Corentyne Block where it is banking on the resources of Frontera to meet expenses for the second well called Wei-1 in October.
