Ewpmf - East West Petroleum Corporation

Discussion in 'Penny Stocks' started by Jon Alba, Jan 10, 2020.

  1. Jon Alba

    Jon Alba Senior Investor

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    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.
     
  2. Jon Alba

    Jon Alba Senior Investor

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    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.
     
  3. Jon Alba

    Jon Alba Senior Investor

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    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
     
  4. Jon Alba

    Jon Alba Senior Investor

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    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.
     
  5. Jon Alba

    Jon Alba Senior Investor

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    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.
     
  6. Jon Alba

    Jon Alba Senior Investor

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    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.
     
  7. Jon Alba

    Jon Alba Senior Investor

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  8. Jon Alba

    Jon Alba Senior Investor

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    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.
     
  9. Jon Alba

    Jon Alba Senior Investor

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    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
     
  10. Jon Alba

    Jon Alba Senior Investor

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    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.
     

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