RE:jay badboy.....
I don't think the $19mm loan by FEC to CGX, made at the first of the year was to cover CGX's share of the well. The well is estimated to cost $90mmm, and currently CGX owns 2/3rds of the concession. Thus their share of the well should be ~$60mm.
Yes, FEC has set aside the $90mm CapEx for Kawa but I am pretty sure that CGX is going to give up some more of their assets (concessions) to gain their share of the Kawa drilling cost. Unless FEC. controlled and chaired by a Venture Capitalist is willing to loan $50 or $60mm more to them when the same Venture Capitalist is controlling CGX. It is really a complex and odd arrangement.
The 2Q numbers show CGX with about $12mm cash, close to $21mm in current debt (accounts payable) plus they show an additional $7mm loan due to FEC... likely part of the $19mm which was to be paid out in draw increments. So, on paper CGX is bankrupt but even with FEC referring to them as a subsidiary, I am pretty sure that CGX must account (pay) for their share of Kawa.
This statement from the 2Q Financials pretty well sums it up, operating losses are up $14mm over just the past 6 months.
How do others think CGX's share of the well will be funded? More of the concession, more debt or?
"The Company has a history of operating losses and as at June 30, 2021 had a working capital deficiency of $16,323,792 (December 31, 2020 - $2,388,378) and an accumulated deficit of $301,313,548 (December 31, 2020 - $297,856,008). 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 interest in the Petroleum Production Licences (“PPLs”), or securing a partner for the deep water port project. As a result and given the Company’s capital commitment requirements under the Company’s PPLs outlined in note 9, the Company does not have sufficient cash flow to meet its operating requirements for the 12 month period from the statement of financial position date. While the Company has been successful in raising financing in the past and believes in the viability of its strategy and that the actions presently being taken provide the best opportunity for the Company to continue as a going concern, there can be no assurances to that effect. As a result there exist material uncertainties which cast significant doubt as to the Company’s ability to continue as a going concern.