EW.V - East West Petroleum Corporation

East West news release shortly after financial results came out. It's basically identical to the summary that was posted. The key now is for the company to complete that royalty deal with NIS of Serbia for the million acre lease in Romania, along with continuing to build cash from their oil production in New Zealand, which goes for Brent pricing.

https://www.stockwatch.com/News/Item/Z-C!EW-3285777/C/EW

 

Some very important articles have come out over the last 2-6 weeks regarding NIS/Serbia and EU sanctions, which could stifle growth in Serbia due to higher gas prices, as well as damage some of the country’s strongest businesses. Based on the articles below, it is quite likely that a deal will occur by November 2022 or sooner, which is when the sixth EU sanction package against Russia takes effect and will hurt Serbia. All that needs to occur is for Gazprom(56% shareholder of NIS) to reduce their stake to 49.9% or less(under 50%) and then all sanctions can be avoided. This will then allow NIS and East West to complete their deal, as stated in EW’s news release and MD&A.

May 2022 – Verification of EW/NIS leases and that they will be going into production

https://www.profit.ro/povesti-cu-profit/energie/vanzarile-de-produse-petroliere-ale-filialei-gazprom-in-romania-au-crescut-de-2-5-ori-in-pofida-razboiului-din-ucraina-20711577

"NIS Petrol Romania has in its portfolio six oil and gas perimeters on the territory of Romania, with operator status in all of them . Four concessions are for exploration-development and exploitation activities in partnership with the Canadian company East West Petroleum (two in Bihor county – EX-2 Tria and EX-3 Băile Felix and two in Timiș county – EX-7 Periam and EX-8 Biled ). A fifth concession is held in partnership with Zeta Petroleum and Armax Gaz, namely the oil development and exploitation concession in the perimeter of DEE V-20 Jimbolia, Timiș county. The sixth concession for exploration-development-exploitation activities is also located in Timiș County, in the EX-12 Crai Nou perimeter."

July 14 2022 – "Serbian President announces potential of Serbia taking Russian stake in NIS to avoid problems from Sanctions"

https://balkaninsight.com/2022/07/14/serbia-mulls-taking-over-mainly-russian-owned-oil-company/

July 29 2022 – NIS Financial results, showing growth of production in Romania. Some of that revenue is likely from EW’s JV lease, which means that the royalty deal pending would start to pay out right away, once completed.

https://ir.nis.rs/fileadmin/template/nis/pdf/Reporting/BusinessReports/English/QR_Q2_2022_eng.pdf

 

East West Petroleum Corp Q1 2022 Results. All Information Is Available On Sedar.

Symbols: EW (Canada) – EWPMF (USA) – 37A (Frankfurt)
Prices (August 29, 2022): $0.10CAD - $0.075USD - €0.06EUR
Shares Outstanding: 89,585,665
Options: 2.79 Million (Between $0.06 and $0.135)
Warrants: Nil

Allowable Capital Losses: $8,440,000
Non-Capital Losses Available For Future Periods: $28,550,000
Canada: $17,329,000 from 2026-2042 & New Zealand: $11,221,000 No Expiry Date
**See Audited Results For More Details**

Financials

ASSETS
Cash: $5,044,036
GST Receivable: $5,129
Amounts Receivable: $592,173
Oil Inventory: $145,663
Prepaid Expenses: $25,260
Property, Plant & Equipment: $269,156
Total Assets: $6,081,417

LIABILITIES
Accounts Payables: $540,255
Decommissioning Liabilities: $1,102,282
Total Liabilities: $1,642,537

Q1 2022 Performance
Revenue: $1,016,787
Net Income: $250,011

Q1 2022 MD&A Highlights

New Zealand

The Company has operations in the Taranaki Basin of New Zealand. All licenses were previously operated by the Company’s original partner, TAG Oil Ltd. (“TAG”), and all wells are targeted shallow Miocene targets in the Urenui and Mt. Messenger formations which have been shown to be productive for oil and gas throughout the Basin, including the Cheal field. The Company holds a 30% working interest in the Petroleum Exploration Permit (“PEP”) 54877 and the Petroleum Mining Permit PMP 60291 (“Cheal East”) and TAG held the remaining 70%. In September 2019 TAG completed the sale of substantially all of its Taranaki Basin assets and operations which included their interest in PEP 54877 and PMP 60291 to Tamarind Resources Pte. Ltd. (“Tamarind”). In light of TAG’s decision to sell the majority of its interest in the Taranaki Basin assets the Company assessed its options with respect to its 30% interest in Cheal East and, on June 24, 2019, the Company signed a heads of agreement pursuant to which the Company had agreed to sell its 30% interest in PEP 54877 and PMP 60291. On August 1, 2020 the Company terminated the Definitive Agreement. The Company continues to assess its go-forward plans, which includes the possible sale of its New Zealand concessions to other buyers.

During fiscal 2022 Cheal conducted a detailed prospectivity review of PEP 54877 and advised the Company that the forecasted economic prospects of PEP 54877 does not meet Cheal’s internal risk criteria. Although no final decision has been made to relinquish the permit in December 2022, the Company determined to record an impairment of $1,627,056 for costs incurred to March 31, 2022.

During Q1/2023 the Company produced 18.1 Mbbl oil and 15.7 Mmcf gas compared to 18.3 Mbbl oil and 11.6 Mmcf gas during Q4/2022. The Cheal-E5 was offline for all of Q4/2022 and Q1/2023. The Cheal-E5 went down due to a downhole related issue which appears to be parted rods. A full workover of the Cheal-E5 well was completed during Q1/2023 and the Cheal-E5 came back on line on June 30, 2022. Approximately 385 bbls of kill fluid needed to be recovered after the workover and oil production started again on July 7, 2022. The Cheal-E6 went offline during Q3/2022 due to downhole related issues which appears to be a wax plug. The operator carried out rod work and installed a new pump while the well was off line. The Cheal-E6 started back on-line near the end of Q4/2022 and was fully producing for all of Q1/2023.

Romania

During fiscal 2010 the Company was informed by the government of Romania that it had been awarded four exploration blocks located in the Pannonian Basin, in western Romania. In May 2011 the Company signed petroleum concession agreements with the National Agency for Minerals and Hydrocarbons (“NAMR”) the government agency in Romania which regulates the oil and gas industry. The four concessions have specific mandatory work programs (the “Romania Work Programs”), which were estimated at US $63,000,000 for all four programs. Production from the concessions is also subject to royalties of between 3.5% to 13.5% based on quarterly gross production payable to the government.

Without a joint declaration of a commercial discovery it is the Company’s position that commercial development of the field cannot proceed, NIS did not share this opinion. Rather than litigating this issue the discussions continued with NIS in an attempt to find a way forward. Given the consequences of a commercial discovery decision and significant funding obligations the Company and NIS continued negotiations on all available options including a monetization event. Negotiations were progressing well and the parties were moving towards final documentation with essential terms of a monetization event agreed, being some limited cash and a royalty interest. The outbreak of war between Ukraine and Russian brought all attempts to implement the agreed terms to a halt, with the issue being that NIS is owned, in part, by a Russian entity which is subject to sanctions. The Company is considering what steps could be implemented to allow the transaction to proceed.

Total sales revenues increased from $290,042 in Q1/2022 to $1,016,787 in Q1/2023. The increase is attributable to a an increase in total sales volumes due to significantly higher production during Q1/2023 compared to Q1/2022. During Q1/2022 the Cheal-E1 well, which is the Company’s biggest producing well, and the Cheal-E2 well were offline due to blockages.

Commitments

The Company’s share of expected exploration and development permit obligations and/or commitments as at June 30, 2022 are approximately $620,000 to be incurred during fiscal 2023. The Company may choose to alter the program, request extensions, reject development costs, relinquish certain permits or farm-out its interest in permits where practical.

Outstanding Share Data

The Company’s authorized share capital is unlimited common shares with no par value. As at August 29, 2022 there were 89,585,665 outstanding common shares and 2,790,000 share options outstanding with exercise prices ranging from $0.06 to $0.135 per share.

 

Today the European Union approved an acquisition by NIS, which is a positive sign for East West. Reason being that sanctions have held back NIS/EW from closing a royalty deal on a million acres of heavily developed Oil/Gas leases in Romania. This Royalty will be worth serious money once the deal is completed as it's going to generate revenue immediately. Gazprom still owns a majority stake in NIS and if the European Union allowed them to acquire HIPP, then acquiring EW's 15% in Romania shouldn't be an issue.

https://ec.europa.eu/commission/presscorner/detail/en/mex_22_5672

Mergers: Commission clears acquisition of HIPP by NIS
The European Commission has approved, under the EU Merger Regulation, the acquisition of HIP-Petrohemija LLC Pancevo (‘HIPP') by Naftna Industrija Srbije a.d. Novi Sad (‘NIS'), both of Serbia. HIPP is a petrochemical company active in the production and distribution of products such as ethylene, polyethylene and synthetic rubber. NIS is a vertically integrated energy company. The Commission concluded that the proposed acquisition would raise no competition concerns given the companies' moderate combined market positions resulting from the proposed transaction. The operation was examined under the simplified merger review procedure. More information will be available on the Commission's competition website, in the public case register under the case number M.10612. (For more information: Arianna Podesta – Tel.: +32 229 87024; Maria Tsoni – Tel.: +32 229 90526)

 

Here's a snippet of another article that came out today and it mentions how the Serbian government could take NIS private this fall. This would make the sanction issue go away as well.

https://carnegieendowment.org/politika/87959

EU sanctions on Russian energy exports are likely to shrink Russia’s economic presence in the Balkans significantly, disrupting some of the flows of Russian oil and gas that have long been a mainstay of trade relations with the region. Serbia has ostentatiously resisted EU pressure to join the sanctions regime, which has had a negative impact on NIS, the country’s major oil company. Gazprom Neft until recently held the majority stake, which served as a key symbol of Russian political and economic influence in Serbia. However, Croatia plans to implement EU sanctions that will cut off NIS’s ability to import Russian oil starting in December. Due to fears of other secondary sanctions, Vucic has indicated that he may need to nationalize NIS this fall and sell Gazprom Neft’s remaining stake in the company to another buyer to keep it operational.

 

East West Petroleum: Stocks trading at Less Than Cash Value on TSX-V (EW)

The Globe and Mail - Sun Sep 25, 7:02AM CDT

https://www.theglobeandmail.com/inv...-less-than-cash-value-on-tsx-v-ew/?ocid=edgsp

East West Petroleum is among the group of TSX Venture Exchange companies currently trading at less than cash value. This means companies whose current share price is less than the cash per share on their balance sheet or stocks with more cash than market cap. (Chart shows P/E of 4.009)

This report is generated monthly. It also shows the value of cash net debt per share to show how much cash per share would be left if the debt was paid off. Stocks in this category are held primarily for speculation. Companies can have more cash per share than the actual share price for a number of reasons including that they just raised capital, are in industries that experience high burn rates and will eat through the cash quickly or there is a lot of uncertainty about the future of the company. Companies earning a positive net income will have a price-to-earnings, or P/E, ratio greater than zero and are worth exploring in more detail.

More about East West Petroleum

East West Petroleum Corp is an oil and gas exploration and production company. It is engaged in exploring, developing and producing from its oil and gas properties. Its current portfolio is made up of exploration concessions in New Zealand and Romania.

 

News Article - Serbia Won't Rule Out Nationalizing Its Oil Industry - Good For East West

This is good news for East West as it would allow the company to complete the cash & royalty deal mentioned in their management discussion information:

On page 4 of MD&A - Negotiations were progressing well and the parties were moving towards final documentation with essential terms of a monetization event agreed, being some limited cash and a royalty interest. The outbreak of war between Ukraine and Russian brought all attempts to implement the agreed terms to a halt, with the issue being that NIS is owned, in part, by a Russian entity which is subject to sanctions. The Company is considering what steps could be implemented to allow the transaction to proceed.

recent article - https://oilprice.com/Latest-Energy-...-Rule-Out-Nationalizing-Its-Oil-Industry.html

 

East West Petroleum Corp Q2 2022. All information is available on Sedar.

Symbols: EW (Canada) – EWPMF (USA) – 37A (Frankfurt)
Prices (November 24, 2022): $0.075CAD - $0.055USD - €0.039EUR
Shares Outstanding: 89,585,665
Options: 400,000 @ $0.10 | 1,890,000 @ $0.06
Warrants: Nil

Allowable Capital Losses: $8,440,000
Non-Capital Losses Available For Future Periods: $28,550,000
Canada: $17,329,000 from 2026-2042 & New Zealand: $11,221,000 (No Expiry Date)
**See Audited Results For More Details**

Financials

ASSETS
Cash: $5,116,085
GST Receivable: $6,602
Amounts Receivable: $294,319
Oil Inventory: $110,014
Prepaid Expenses: $36,082
Property, Plant & Equipment: $230,009
Total Assets: $5,793,111

LIABILITIES
Accounts Payable: $289,284
Decommissioning Liabilities: $997,138
Total Liabilities: $1,286,422

Six Month Performance
Revenue: $1,670,890
Comprehensive Income: $317,820

(Only recent updates. Prior quarterly information is available on Sedar)

Romania

Without a joint declaration of a commercial discovery it is the Company’s position that commercial development of the field cannot proceed, NIS did not share this opinion. Rather than litigating this issue the discussions continued with NIS in an attempt to find a way forward. Given the consequences of a commercial discovery decision and significant funding obligations the Company and NIS continued negotiations on all available options including a monetization event. Negotiations were progressing well and a non-binding letter of intent was finalized. The parties were moving towards final documentation with essential terms of a monetization event agreed, being a cash payment of US $500,000 and a royalty interest of 2.1%, as defined. The outbreak of war between Ukraine and Russia brought all attempts to implement the agreed terms to a halt, with the issue being that NIS is owned, in part, by a Russian entity which is subject to Canadian government sanctions. The Company and NIS are working on the final documentation to implement the agreed terms once closing is possible.

 

Just a little refresher for current shareholders and new investors regarding Romania:

https://www.eastwestpetroleum.ca/projects/romania/

The original deal struck between East West Petroleum and NIS in 2011 was that NIS would earn 85% interest in this 1,007,500-acre project by completing the first phase of work, having an estimated budget of $62,335,000 USD and proving production capabilities on the first part of the package.

This has been achieved and facilities + test production is going on as we speak at the moment, as per the most recent NIS financial report:

https://ir.nis.rs/fileadmin/template/nis/pdf/Reporting/BusinessReports/English/QR_Q3_2022_eng.pdf

(see pages 5, 6, 24, 34) – All dialogue regarding Teremia is based on the land parcel with East West

Recently, East West made a deal with NIS to sell it’s remaining 15% stake in exchange for $500,000 USD and a 2.1% Royalty on production from anywhere on the 1,007,500-acre project, without any time or value cap. This makes sense because NIS is a multi billion-dollar company from Serbia and East West cannot keep up investing in such a large project. However, NIS can easily pay EW several million dollars a year from a royalty standpoint, in order to fully control and produce from this lease. Keeping in mind this is just the first phase of the project and there are many other drill targets to search for Oil/Gas.

What stops this deal from completing at the moment are sanctions from the Russia/Ukraine war. Gazprom owns a 56% stake in NIS, which doesn’t allow for the deal to be completed. In the meantime, Serbia has looked at either selling Gazproms stake in the company, or nationalizing NIS. This is because sanctions will begin for Serbia soon, based on association with Gazprom, and NIS is the largest company in country. Either solution would allow for the deal to be completed.

In the end, this royalty has tremendous value because it allows East West to generate cash flow from the lease, without any production cost risk. Payments will vary somewhat from quarter to quarter, but it would continue for quite some time.

 

East West CFO DeMare resigns; Lim appointed in interim

2023-02-02 14:21 ET - News Release

An anonymous director reports

EAST WEST PETROLEUM ANNOUNCES CFO CHANGE

East West Petroleum Corp. has accepted the resignation of Nick DeMare as chief financial officer of the company and has appointed Harvey Lim as interim CFO in his stead. Mr. DeMare will remain as interim CEO and corporate secretary of the company.

Mr. Lim holds a bachelor of commerce degree from the University of British Columbia and is a member in good standing of the Institute of Chartered Professional Accountants of British Columbia. Mr. Lim has previously worked for Coopers & Lybrand (PricewaterhouseCoopers LLP) and Ingot Management Ltd. Since 1991, Mr. Lim has held the position of controller for Chase Management Ltd., a private company which provides accounting and management services to companies listed on the TSX Venture Exchange or the Toronto Stock Exchange and its predecessors. Mr. Lim also serves as officer and/or director of other publicly listed companies.

About East West Petroleum Corp.

East West is a TSX Venture Exchange-listed company established in 2010 to invest in international oil and gas opportunities. The company has its primary focus on two key areas: New Zealand, where it has established production and cash flow, and Romania, where it is carried to production on an exploration program. In Romania, the company has exploration rights in four exploration concessions covering one million acres in the prolific Pannonian basin of western Romania with Naftna Industrija Srbije. The company does not own the acres but has exploration rights.

 

Continued insider buying on East West. Financial results should be out end of February or early March:

https://ceo.ca/api/sedi?symbol=EW

 

Quarterly results came out today for East West. The company still has over $5 million CAD in cash with total assets at $5.69 million and total liabilities at $1.32 million.

Revenue was down for the quarter due to some wells being worked over, which means we should get a bounce back next quarter. But the key thing that changed in their MD&A that caught my eye was this:

The Company and its legal counsel continue to work on the final documentation including possible amendments which would allow closing to occur. In addition the Company has recently been advised by NIS that it is considering a sale of the four exploration blocks and the Company has agreed that its 15% interest can be included in such efforts. Any such endeavors are not expected to be advanced in the near term.

Selling the Romanian asset is a much better outcome for NIS and EW, rather than putting it into production and slowly getting paid out. We know that NIS has invested over $60 million USD in this asset over the last decade, with East West putting nothing into it, but still retaining a 15% stake.

 

East West financial results came out recently and the company still has $5 million cash in it’s treasury, with Total assets of $5.8m CAD & Liabilities of $1.16m CAD.

Oil production in New Zealand is stable, showing $600K in revenue for the quarter with a $76,000 comprehensive income.

The major catalyst seen in their MD&A is a sale for their Romanian assets could come in Q4 2023. Keeping in mind that NIS had estimated spending at least $60 million USD on this project, so an asset sale would generate a large portion of cash back to East West.

On Page 3 of the Q1 2023 MD&A: The Company and its legal counsel continue to work on the final documentation including possible amendments which would allow closing to occur. In addition the Company has recently been advised by NIS that it is considering a sale of the remaining exploration blocks and the Company has agreed that its 15% interest can be included in such efforts. While the sale process is advancing there is no guarantee that terms will be settled. The Company expects an update in the fourth quarter of calendar 2023.

Additionally, it looks as if a fund has acquired a position in East West (see page 14 of the presentation):

https://www.mineralandfinancial.com.../MFI-Investor-Presentation-Aug-2023-v-2.0.pdf

 

East West Petroleum strikes deal to sell Cheal block

2023-11-01 15:25 ET - News Release

Mr. Nick DeMare reports

AGREEMENT FOR THE SALE OF NEW ZEALAND OIL & GAS PROPERTIES

East West Petroleum Corp. has entered into an interim agreement for the sale of its oil and gas interests in New Zealand (the Cheal block).

The company currently holds a 30-per-cent interest in PMP 60291 and the interim agreement contemplates the purchase of the company's interest in the Cheal Block by the 70-per-cent owner. The key terms of the interim agreement are as follows:

• Purchase price of $1-million (U.S.);

• Effective date of sale is July 31, 2023;

• Purchaser assumes all reclamation obligations, which are estimated to be $633,820 (U.S.);

• Contingent consideration of $350,000 (U.S.) should an additional well be drilled and completed;

• Deposit of $250,000 (U.S.) on signing definitive agreement.

The terms described herein are binding under the interim agreement but subject to the negotiation and execution of a definitive agreement.

In addition to the definitive agreement, the transaction is conditional upon all necessary New Zealand government approvals, regulatory and exchange approval as well as approval of the East West shareholders.

In connection with the required shareholder approvals, an annual and special meeting of the shareholders of the company has been scheduled for Dec. 15, 2023.

 

Hey Tom, thank you.

East West is also in the midst of selling their Romania asset, where the JV partner has invested over $60 million USD over the past decade. I feel once that is completed, there will be lots of cash to work with and I suspect future oil projects will be North America based.

Also have a look at Fintech Select Ltd. and Visionstate Corp, those are two interesting tech plays that are growing. Fintech is already profitable and Visionstate is slated to be profitable next year.

 

East West Petroleum Announces Results of Annual & Special Meeting

2023-12-15 14:21 ET - News Release

Vancouver, British Columbia--(Newsfile Corp. - December 15, 2023) - East West Petroleum Corp. (TSXV: EW) ("East West" or the "Company") is pleased to announce that at the Annual & Special Meeting of Shareholders of the Company (the "Meeting") held on December 15, 2023, the shareholders re-elected Messrs. Nick DeMare, Mark T. Brown and Kevin William Haney as directors of the Company. The shareholders also passed all other resolutions including an ordinary resolution to ratify the stock option plan, pursuant to which the Company may grant stock options up to 10% of its issued and outstanding common shares at the time of the grant; and a special resolution approving the sale of the Company's oil and gas properties in New Zealand, as announced November 1, 2023. The Company is continuing to work towards finalizing the definitive agreement with the purchaser and further news will be issued once available.

Following the Meeting, the Board appointed Mr. Nick DeMare as Interim CEO and Corporate Secretary of the Company and Mr. Harvey Lim as Interim CFO. Messrs. DeMare, Brown, and Haney were appointed to the audit committee.

On Behalf of the Board

"Nick DeMare"
Nick DeMare,
Director & Interim CEO

 

East West Petroleum Announces Sale of New Zealand Oil & Gas Properties
2024-01-10 05:01 ET - News Release

Vancouver, British Columbia--(Newsfile Corp. - January 10, 2024) - East West Petroleum Corp. (TSXV: EW) ("East West" or the "Company") reports that further to the Company's news releases dated November 1st and December 15th , 2023 the Company and purchaser have finalized and signed the definitive agreement for the sale of the Company's oil and gas interests in New Zealand.

A refundable deposit of US$250,000 will now be paid by the purchaser. The sale is subject to receipt of all necessary New Zealand government approvals and the process to obtain such approvals is now underway. Further updates will be provided but the approval process will take some time.

On Behalf of the Board

Nick DeMare,
Director & Interim CEO
604-685-9316