RE:RE:RE:RE:RE:Re waitingWhat has changed? The below was taken from the FEC audited 2019 year end financials posted on their website.
Frontera is running this business and I believe that Soulfire is exactly right.
Lead time items required for Drilling in 2021.
Acquisition of CGX Energy Inc.
On March 13, 2019, the Company acquired control of CGX Energy Inc. (“CGX”) through its participation in an equity rights offering, whereby the Company acquired 101,316,916 common shares of CGX for cash consideration of $19.0 million. The Company’s equity interest in CGX prior to the acquisition was 48.2% and was accounted for as an associate using the equity method. As a
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Notes to the Consolidated Financial Statements (In thousands of U.S.$, unless otherwise stated)
result of the share purchase, the Company’s equity interest increased to 67.78%. CGX is a company listed on the TSX Venture Exchange and is involved in the exploration of petroleum in Guyana.
This transaction was accounted for as a business combination through a step acquisition in accordance with IFRS 3. As a result, the Company recognized a gain of $10.9 million in Other income (loss) relating to the remeasurement of its previously held 48.2% equity interest to fair value immediately prior to the acquisition. As a result of the acquisition, pre-existing relationships between the Company and CGX were effectively settled, resulting in an adjustment to the purchase price for the fair value of loans and advances totaling $19.6 million. The Company elected to measure the non-controlling interest in CGX at fair value.
The total consideration paid and the final purchase price allocation over the fair value of assets and liabilities acquired at the date of acquisition are as follows:
Purchase price
Fair value of previously held equity interest before acquisition
Fair value of pre-existing balances effectively settled on the acquisition Cash consideration
Total purchase price
Fair value of assets acquired and liabilities acquired
Cash and cash equivalents
Accounts receivable
Accounts payable and accrued liabilities Exploration and evaluation assets Properties, plant and equipment
Net assets Non-controlling interest
Purchase consideration
Cash paid
Net cash acquired
Net consolidated cash inflow
$
$ $
$ $
$
CGX
10,939 19,588 19,007 49,534
23,303 453
(20,818) 54,040 7,154 64,132
(14,598) 49,534
(19,007) 23,303 4,296
These Consolidated Financial Statements include the results of CGX for the period following the acquisition date of March 13, 2019. Since the date of acquisition, CGX has contributed revenues and a net loss of $ Nil and $4.3 million, respectively, to the financial results of the Company. If the acquisition of CGX occurred on January 1, 2019, the Company’s results for the year ended December 31, 2019, would have included revenues and a net loss of $ Nil and $5.5 million, respectively.
On September 25, 2019, the Company converted the principal amount outstanding of $8.8 million under its bridge loan facility with CGX resulting in the acquisition of an additional 40,000,000 common shares. During the fourth quarter of 2019, CGX issued 375,000 common shares under their stock option plan reducing the Company’s interest to 72.41% as of December 31, 2019.