CGX Energy Files Third Quarter Financial Statements

Executive Summary

• CGX Energy released its unaudited Q3 2025 consolidated financial statements and MD&A.
• The company drew $1.9 million from a senior secured, non‑revolving loan facility with Frontera Energy (total commitment $2.5 million) at 19.32% interest.
• An impairment of $56.4 million was recognized on the Corentyne E&E asset, leaving its carrying value at $0 as of September 30 2025; the dispute with the Government of Guyana remains unresolved.

Key Details

• Financial Disclosures: Unaudited consolidated statements and MD&A for Q3 2025 posted to CGX website and SEDAR+.
• Senior Secured Loan Facility:
• Lender: Frontera Energy Corporation (through subsidiary).
• Commitment: $2.5 million; drawdown of $1.9 million on November 5 2025.
• Structure: Non‑revolving, tranches up to $1.9 million over six months after conditions precedent are met.
• Interest: 19.32% per annum, compounded monthly, payable at maturity (one year after execution or later at Frontera’s discretion).
• Repayment: Principal + accrued interest due one year after execution; early repayment possible at Frontera’s option.
• Related‑Party Transaction: Loan is a related‑party transaction under MI 61‑101; CGX relies on exemptions from formal valuation and minority shareholder approval.
• License/Legal Dispute – Corentyne Block:
• Notice of Intent filed by Frontera and affiliates on March 26 2025 alleging breaches of the UK‑Guyana BIT and Guyana Investment Act.
• 90‑day consultation period ongoing; no resolution reached as of November 4 2025.
• Government of Guyana proposed meeting dates (Nov 25 or Dec 2 2025) to discuss dispute “without prejudice.”
• CGX maintains that its license remains valid and the Petroleum Agreement has not been terminated, contrary to GoG’s position that interest expired June 28 2024.
• Impairment Charge:
• $56.4 million impairment recorded in Q2 loss statement due to uncertainty over recoverability of Corentyne E&E asset.
• Carrying value of the asset as of September 30 2025: $0 (down from $56.2 million on Dec 31 2024).
• Joint Venture Ownership Structure:
• CGX Resources Inc. (CRI) holds 72.52% working interest; Frontera Guyana holds 27.48%, including a 4.52% interest assigned to Frontera in 2023.
• Assignment pending Government of Guyana approval but enforceable between CRI and Frontera Guyana.
• Use of Loan Proceeds: To fund CGX’s share of corporate working capital and other agreed‑upon expenditures related to the Joint Venture.

Notable Quotes

• “We remain committed to asserting our legal rights under applicable treaties and agreements while continuing to seek a mutually agreeable resolution with the Government of Guyana,” – Interim CEO & CFO Daniel Sanchez.