CALGARY, AB, Aug. 18, 2026 /CNW/ -- CanAsia Energy Corp. ("CanAsia" or the "Company") (CEC -- TSXV) reports 2026 second quarter consolidated financial and operating results.
The Company is today filing its unaudited consolidated financial statements as at and for the six months ended June 30, 2026 and related management's discussion and analysis (the "MD&A") with Canadian securities regulatory authorities. Copies of these documents may be obtained online at www.sedarplus.com or the Company's website, www.canasiacorp.com.
Commenting today on CanAsia's 2026 second quarter results, President and CEO Jeff Chisholm stated: "With the divestment of the Sawn Lake SAGD heavy oil asset, CanAsia will now focus on conventional oil assets within the Asia Pacific region, an area within which the principals of CanAsia have historically had success. Just over a year ago, CanAsia was part of a bidding consortium for onshore Thailand concession L8. After some delays, related partly to the national election that was held in February 2026, we anticipate the possible announcement of the Thailand 25(th) Onshore bid round results at any time".
HIGHLIGHTS
-- Subsequent to June 30, 2026, the Company entered into a share purchase
agreement on August 14, 2026 (the "Purchase and Sale Agreement") with a
privately held arm's length Alberta corporation (the "Purchaser")
pursuant to which the Purchaser has agreed to acquire all of the issued
and outstanding shares of Andora Energy Corporation (the "Andora
Transaction") for a base purchase price of $30 million payable in cash,
subject to a customary net debt adjustment. In addition, the Purchaser
has agreed to pay CanAsia an additional amount of $10 million as
contingent consideration (the "Contingent Consideration") upon achieving
first oil sales from Andora's Sawn Lake project, subject to certain terms
and conditions as set forth in the Purchase and Sale Agreement, including
among other things, the installation and commissioning of a produced
water boiler at the Sawn Lake project site. In addition to the foregoing,
the parties have entered into a conditional payment agreement (the
"Conditional Payment Agreement") to be effective at closing of the Andora
Transaction pursuant to which Andora will pay to CanAsia certain
additional amounts calculated based on the crude oil produced from
Andora's Sawn Lake project. Pursuant to the Conditional Payment
Agreement, CanAsia will be entitled to a share of the proceeds from
production based on the applicable monthly average price of Western
Canadian Select crude oil, at Nil% where the price is $78 and below, 1%
where the price is greater than $78 and less than or equal to C$88, 2%
where the price is greater than $88 and less than or equal to $105 and 3%
where the price is greater than $105, up to an aggregate maximum payment
of $15 million. The total value of the Andora Transaction will be up to
$55 million in cash paid to the Company, assuming satisfaction of all of
the conditions under the Contingent Consideration and the Conditional
Payment Agreement. The completion of the Andora Transaction is subject to
the approval of the shareholders of CanAsia and the TSX Venture Exchange.
There can be no assurance that the Andora Transaction will be completed
as proposed, or at all. See "Recent Developments" in the MD&A for
additional information regarding the Andora Transaction.
-- On May 6, 2026, the Company, together with Andora, entered into a
Cooperative Research and Development Agreement (the "KIGAM Agreement")
with the Korea Institute of Geoscience and Mineral Resources ("KIGAM")
with respect to Andora's heavy oil project in Sawn Lake, Alberta. The
KIGAM Agreement provides for staged project funding by KIGAM of up to CAD
$26 million over three years, with a possible fourth-year operating
period. The KIGAM Agreement is structured as a cooperative development
arrangement for the demonstration and operation of solvent-assisted
thermal bitumen recovery and related processing technologies at Sawn
Lake. The project scope includes recommissioning Andora's suspended
facility, installing Andora's proprietary produced water boiler ("PWB")
and enhanced steam-SAGD related systems, and later installing an
experimental partial upgrader and water treatment modules. Andora agrees
that, upon delivery of the PWB module to the Sawn Lake site, it shall
assign to KIGAM an undivided fifty percent ownership interest in the PWB
patent. As at June 30, 2026, the Company has received a total of $9.5
million in funding pursuant to the KIGAM Agreement. See "Recent
Developments" in the MD&A for additional information regarding the KIGAM
Agreement.
-- CanAsia had a working capital deficit of $2.2 million, no long-term debt
and shareholders' equity of $23.6 million at June 30, 2026.
-- Common shares outstanding were 113.6 million at August 17, 2026 and at
June 30, 2026.
-- Net income was $18.9 million ($0.17 per share) in the second quarter of
2026 compared to net loss of $0.9 million ($0.01 per share) in the second
quarter of 2025. As a result of the Agreement with KIGAM, income in the
second quarter of 2026 included an impairment recovery of $19.9 million
related to the Sawn Lake exploration and evaluation assets.
-- Cash flow used in operations in the second quarter of 2026 was $0.5
million ($0.00 per share) in the second quarters of 2026 and 2025. Cash
flow used in operations in the second quarter of 2026 was mainly
attributable to general and administrative expense of $1.1 million and
operating expense of $0.1 million to restart and maintain the facility
of Andora.
-- General and administrative expense was $1.1 million in the second quarter
of 2026 compared to $0.5 million in the second quarter of 2025. General
and administrative expense is comprised primarily of expenses related to
personnel and premises, external services, and public company costs.
-- Personnel and premises costs were $0.7 million in the second
quarter of 2026 compared to $0.2 million in the second quarter of
2025. These costs include salaries and benefits for employees, and
fees incurred for consultants. They also include rent and other
office costs related to the Company's Calgary office.
-- External service costs were $0.2 million in the second quarters of
2026 and 2025. These costs are mainly related to professional fees
for legal, audit, tax services, information technology and
engineering.
-- Public company costs were $0.1 million in the second quarters of
2026 and 2025. These costs were incurred for maintaining the
Company's status as a public company and mainly related to
shareholder reporting and meetings, TSXV fees, transfer agent,
insurance and directors' fees.
-- Operating expenses were $0.1 million in the second quarter of 2026
compared to $0.2 million in the second quarter of 2025. These expenses
were incurred to restart and maintain the assets of Andora's SAGD project
facility and wellpair at Sawn Lake Central.
-- The natural gas pipeline tariff agreement which was entered into
between Andora and a third party in 2018 with a commencement date of June
1, 2023 was recognized as an onerous contract under IAS 37 since the
operation at Sawn Lake is shut-in. The Company has recognized a
provision of $0.6 million representing the net cost of fulfilling the
contract as at June 30, 2026. The Company has reassessed the expected
period during which the contract is anticipated to remain onerous and
adjusted the provision to account for the revised onerous period,
resulting in a recovery of $0.3 million in the statement of operations
for the three months ended June 30, 2026.
-- The current portion of the decommissioning provision of $0.6 million as
at June 30, 2026 was related to the legacy subsidiaries of POEH which had
held interests in the East Jabung Production Sharing Contract in
Indonesia and a well pertaining to Andora's interests in Sawn Lake,
Alberta. CanAsia is withdrawing from activities in Indonesia and
decommissioning related costs are expensed when incurred. The non-current
portion of the decommissioning provision of $1.8 million as at June 30,
2026 pertained to Andora's interests in Sawn Lake, Alberta.
OUTLOOK
With the divestment of the Sawn Lake SAGD heavy oil asset, CanAsia will now focus on conventional oil assets within the Asia Pacific region. Just over a year ago, CanAsia was part of a bidding consortium for onshore Thailand concession L8. After some delays, related partly to the national election that was held in February 2026, CanAsia now anticipates the possible announcement of the Thailand 25(th) Onshore bid round results at any time.
Liquidity and Capital Resources
At June 30, 2026, CanAsia had a working capital deficit of $2.2 million (including the current portion of the natural gas pipeline tariff provision of $0.3 million, the current portion of the decommissioning provision of $0.6 million, and the current portion of the project funding due to KIGAM of $0.6 million). Non-current deposits of $1.3 million consisted of deposits placed with the Alberta Energy Regulator in Canada for the interests of Andora at Sawn Lake. The non-current portion of the natural gas pipeline tariff provision was $0.3 million and the non-current portion of the decommissioning provision was estimated at $1.8 million for Andora's wells and facilities in Canada. The Company's exploration and evaluation assets at June 30, 2026 amounted to $26.2 million.
As a result of the KIGAM Agreement entered into with KIGAM dated May 6, 2026, the Company is expected to have sufficient funding available to restart production at the Sawn Lake property. On August 14, 2026, the Company entered into the Purchase and Sale Agreement providing for the sale of Andora for a base purchase price of $30 million plus additional deferred and conditional payments. See "Highlights" above and "Recent Developments" in the MD&A.
Subject to closing of the Andora Transaction, the Company expects to have sufficient capital to support general corporate activities, general and administrative costs and for the initial evaluation and exploration program in respect of a Thailand concession in the event the Company is successful in the Thailand bid round.
Financial and Operating Results
Three months ended June Six months ended June 30,
30,
($000s of Canadian 2026 2025 2026 2025
dollars except where
indicated)
FINANCIAL
Financial Statement
Results
Net income (loss)
(1) 18,937 (900) 18,263 (1,630)
Per share -- basic $ 0.17 $ (0.01) $ 0.16 $ (0.01)
Per share --
diluted $ 0.16 $ (0.01) $ 0.15 $ (0.01)
Cash flow used in
operating
activities (2) (458) (536) (1,024) (1,711)
Per share -- basic
and diluted $ (0.00) $ (0.00) $ (0.01) $ (0.02)
Cash flow from (used
in) investing
activities (2) 102 (6) 89 (6)
Per share -- basic
and diluted $ 0.00 $ (0.00) $ 0.00 $ (0.00)
Cash flow from (used
in) financing
activities (2) 109 (12) 99 (14)
Per share -- basic
and diluted $ 0.00 $ (0.00) $ 0.00 $ (0.00)
Working capital (2,216) 1,460 (2,216) 1,460
Shareholders' equity
(3) 23,590 6,402 23,590 6,402
Weighted average
shares outstanding
(000s) 113,084 112,794 112,940 112,794
General and
administrative
expense (1) (1,108) (546) (1,605) (1,030)
Operating expense
(1) (93) (151) (247) (315)
Natural gas pipeline
tariff recovery
(provision) (1) 298 (14) 331 16
Stock-based
compensation (1) (24) (84) (61) (194)
Amortization (1) (23) (15) (47) (29)
Loss on
decommissioning
provision
settlement (1) - - - (31)
Impairment recovery
(1) 19,934 - 19,934 -
Finance income (1) 8 10 16 20
Foreign exchange
loss (1) (55) (100) (58) (67)
Net income (loss)
(1) 18,937 (900) 18,263 (1,630)
(1) As set out in the Consolidated Statements of Operations
and Comprehensive Income (Loss) in CanAsia's
Consolidated Financial Statements.
(2) As set out in the Consolidated Statements of Cash
Flows in CanAsia's Consolidated Financial Statements.
(3) As set out in the Consolidated Statements of Changes
in Shareholders' Equity in CanAsia's Consolidated
Financial Statements.
Cautionary Statements
This press release may contain forward-looking information. Forward-looking information is generally identifiable by the terminology used, such as "will", "expect", "believe", "estimate", "should", "anticipate", "potential", "opportunity" or other similar wording. Forward-looking information in this press release may include, but is not limited to, the strength of the Company's financial position; the need for and availability of additional capital; statements with respect to the research and development project at Sawn Lake, including project timelines with respect thereto; statements with respect to the Company's bid, as part of a consortium, for one concession with a non-operated 30% participating interest pursuant to the onshore Thailand 25th licensing round, including the outcome thereof and the expected timing of the government of Thailand's award of concessions; statements with respect to the Andora Transaction, including the closing thereof and the receipt of the consideration payable thereunder, including the deferred and conditional payments.
By its very nature, forward-looking information requires CanAsia and its management to make assumptions that may not materialize or that may not be accurate. In addition, forward-looking information is subject to known and unknown risks and uncertainties and other factors, some of which are beyond the control of CanAsia, which could cause actual events, results, expectations, achievements or performance to differ materially. Although CanAsia believes that the expectations reflected in its forward-looking information are reasonable, it can give no assurances that those expectations will prove to be correct. In particular, there can be no assurance that the government of Thailand will accept CanAsia's bid on the terms proposed or at all or that the Process will result in any transaction or that the Andora Transaction will be completed as proposed, or at all. CanAsia undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
See "Forward-Looking Statements" in CanAsia's management's discussion and analysis for the three months ended June 30, 2026 for more information on the assumptions on which the Company has relied and the risks and uncertainties and other factors that could impact the forward-looking information in this press release. CanAsia undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE CanAsia Energy Corp.
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