Group 1 - Hong Kong low-priced oil and gas stocks opened higher, with Jixing New Energy (03395.HK) rising nearly 15% [1] - Extended Petroleum International (00346.HK) increased by over 11% [1] - Baikin Oil Services (02178.HK) saw a rise of over 13% [1]

Group 1 - Hong Kong low-priced oil and gas stocks experienced a pullback in gains, with Jixing New Energy dropping by 14.5% [1] - Extended Petroleum International saw a decline of 6.56% [1] - Shandong Molong (002490) fell by 6.3% [1] Group 2 - Investors can buy Hong Kong stocks through A-share accounts without the need for Hong Kong Stock Connect, allowing for T+0 trading [1]

Company Overview - Jixing New Energy (stock code: 03395.HK) is primarily engaged in the exploration, development, and production of oil and gas, with a focus on natural gas [2][3] - The company is headquartered in Alberta, Canada, and its main assets and operations are concentrated in two core areas: Alberta Foothills and Peace River [2] Financial Performance - As of March 31, 2025, Jixing New Energy reported total revenue of 13.72 million yuan, a year-on-year decrease of 2.72% [1] - The company recorded a net profit attributable to shareholders of -18.01 million yuan, a year-on-year decrease of 4.26% [1] - The gross profit margin stood at -54.16%, and the debt-to-asset ratio was 195.64% [1] Stock Performance - On June 16, the stock price closed at 0.234 HKD per share, marking a 200% increase with a trading volume of 7.864 million shares and a turnover of 1.702 million HKD [1] - Over the past month, the stock has seen a cumulative increase of 8.33%, but it has declined by 58.95% year-to-date, underperforming the Hang Seng Index by 19.11% [1] Industry Valuation - The average price-to-earnings (P/E) ratio for the oil and gas industry (TTM) is -3.17, with a median of 4.1 [2] - Jixing New Energy's P/E ratio is -0.37, ranking 44th in the industry [2] - Comparatively, other companies in the sector have P/E ratios such as Zhujiang Steel Pipe (0.83), CGII HLDGS (4.1), and others ranging from 5.56 to 5.76 [2] Strategic Focus - The company's long-term business strategy aims to enhance shareholder value by continuing to explore and develop its natural gas and oil asset base across three core exploration and production areas [3]

Company Overview - Jixing New Energy Limited (stock code: 03395.HK) is primarily engaged in the exploration, development, and production of oil and gas, with a focus on natural gas [2] - The company is headquartered in Alberta, Canada, and its main assets are concentrated in two core areas: Alberta Foothills and Peace River [2] - As of June 30, 2022, the company held 28,000 net acres of land in the Western Canadian Sedimentary Basin (WCSB) and produced an average of 1,821 barrels per day of natural gas and oil [2] Financial Performance - As of March 31, 2025, the company reported total revenue of 13.72 million CNY, a decrease of 2.72% year-on-year [1] - The net profit attributable to shareholders was -18.01 million CNY, reflecting a year-on-year decline of 4.26% [1] - The gross margin was -54.16%, and the debt-to-asset ratio stood at 195.64% [1] Market Performance - On May 23, the stock price closed at 0.1 HKD per share, marking an increase of 31.58% with a trading volume of 213,000 shares and a turnover of 20,000 HKD [1] - Over the past month, the stock has seen a cumulative increase of 5.56%, but it has declined by 60% year-to-date, underperforming the Hang Seng Index by 17.37% [1] - Currently, there are no institutional investment ratings for the stock [1] Industry Valuation - The average price-to-earnings (P/E) ratio for the oil and gas industry (TTM) is -6.48, with a median of 4.14 [1] - Jixing New Energy's P/E ratio is -0.36, ranking 44th in the industry [1] - Comparatively, other companies in the sector have P/E ratios such as Zhujiang Steel Pipe (0.86), CGII HLDGS (4.14), and others ranging from 4.84 to 5.21 [1]

Financial Performance - For the three months ended March 31, 2025, JX Energy Ltd. reported total revenue of CAD 2,723,412, a slight decrease from CAD 2,799,435 in the same period of 2024, representing a decline of approximately 2.7%[6]. - The company experienced an operating loss of CAD 2,561,009 for the three months ended March 31, 2025, compared to an operating loss of CAD 2,485,297 in the prior year, indicating an increase in losses of about 3.1%[6]. - JX Energy Ltd. reported a net loss of CAD 3,575,957 for the three months ended March 31, 2025, compared to a net loss of CAD 3,429,736 in the same period of 2024, indicating an increase in losses of approximately 4.3%[6]. - The company’s production sales revenue for the three months ended March 31, 2025, was CAD 2,908,480, an increase from CAD 2,827,452 in the same period of 2024, representing a growth of about 2.9%[6]. - The company reported a production revenue of CAD 2,908,000 in Q1 2025, compared to CAD 1,174,000 in Q4 2024, indicating a significant recovery in production[95]. - For the three months ended March 31, 2025, total revenue from product sales was CAD 2,908,480, an increase of 2.86% compared to CAD 2,827,452 for the same period in 2024[45]. - The total loss and comprehensive loss was CAD (3,576) thousand, a decrease of 4% compared to CAD (3,430) thousand for the same period in 2024[114]. Assets and Liabilities - Total assets as of March 31, 2025, were CAD 25,726,186, a decrease from CAD 25,888,120 as of December 31, 2024, reflecting a reduction of approximately 0.6%[5]. - The company's total liabilities increased to CAD 50,330,679 as of March 31, 2025, up from CAD 47,349,095 at the end of 2024, representing a rise of about 6.3%[5]. - The total financial liabilities as of March 31, 2025, amounted to CAD 53.77 million, with CAD 18.51 million due within one year[64]. - The company's total net exposure to foreign currency risk as of March 31, 2025, was CAD (16.09 million), slightly increased from CAD (16.07 million) as of December 31, 2024[71]. - The company's long-term debt totaled 14,584,860 CAD as of March 31, 2025, an increase from 13,646,448 CAD as of December 31, 2024[28]. - The company’s long-term debt (excluding current portions) as of March 31, 2025, was CAD 8.93 million, a decrease from CAD 9.10 million as of December 31, 2024[74]. Cash Flow and Financing - The company’s cash and cash equivalents decreased to CAD 160,284 as of March 31, 2025, down from CAD 211,491 as of December 31, 2024, a decline of about 24.2%[5]. - Operating cash flow for the three months ended March 31, 2025, was negative CAD 228,403, a significant decline from a positive cash flow of CAD 40,634 in the same period of 2024[8]. - The company issued bonds resulting in cash inflow of CAD 2,114,802 during the financing activities for the three months ended March 31, 2025[8]. - The company received CAD 1.1 million from a shareholder, with the loan agreement yet to be signed[31]. - The company has a working capital deficit of CAD 16.3 million as of March 31, 2025, with full drawdowns of USD 11.5 million from the CIMC and Jixing loans[126]. Production and Sales - In Q1 2025, the average daily production of natural gas was 10,231 cubic feet per day, a substantial increase from 3,746 cubic feet per day in Q4 2024[95]. - Total sales volume increased by 22% year-over-year, driven by increased wellhead pressure, resulting in production exceeding historical levels[101]. - Natural gas production rose by 27% to 10,231 cubic feet per day, while oil production decreased by 35% to 26 barrels per day due to maintenance and repair[100][101]. - Natural gas liquid revenue surged by 65% year-over-year, attributed to increased production and significantly higher average sales prices[103]. Expenses and Costs - Total operating costs rose by 15% to CAD 4,199,000, reflecting increased production levels, while unit costs for natural gas and NGLs decreased by 7%[108]. - Royalty expenses increased significantly by 520% to CAD 198,000, with an effective average royalty rate rising to 7% from 1%[107]. - General and administrative expenses decreased by 69% to CAD 193,000, reflecting changes in executive compensation and board fees[109]. - Interest expenses and financing costs for term debt decreased by 24% to CAD 68 thousand from CAD 90 thousand year-over-year[111]. Corporate Governance and Compliance - The company has adopted the corporate governance code to ensure business activities and decision-making processes are properly regulated[162]. - The board has established a framework for identifying and managing key risks, with annual reviews of the internal control system's effectiveness[156]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests[162]. - The audit and risk committee, consisting of three independent non-executive directors, reviewed the interim results for the three months ending March 31, 2025[165]. Future Outlook and Risks - The company’s ability to continue as a going concern is dependent on generating positive cash flow from operations and obtaining additional financing[12]. - The company is facing significant operational and financing uncertainties due to global market volatility, including impacts from the Ukraine and Middle East conflicts[127]. - The company anticipates a significant increase in natural gas prices in 2025 based on the average prices from 2024, despite current market volatility[92]. - The company plans to explore additional drilling targets if prices reach the average levels of 2022 during 2025 and 2026[92].

Financial Performance - Production revenue for the year ended December 31, 2024, was CAD 4.968 million, a decrease of 63% compared to CAD 13.561 million in 2023[8]. - The company reported a net operating loss of CAD 8.619 million for 2024, compared to a loss of CAD 1.496 million in 2023, representing a 476% increase in losses[10]. - The company reported a net loss of CAD 20.267 million for the year, compared to a loss of CAD 21.146 million in 2023[10]. - The company generated production revenue of CAD 4.968 million in 2024, a decrease of 63.4% compared to CAD 13.561 million in 2023[53]. - The operating net income for the year ended December 31, 2024, was a loss of CAD 8,619,000, representing a 476% increase in losses compared to CAD 1,496,000 in 2023[135]. - Adjusted EBITDA for the year ended December 31, 2024, was a loss of CAD 10,073,000, which is a 213% increase in losses compared to CAD 3,221,000 in 2023[136]. - The company reported a significant decrease in royalty expenses, down 92% to CAD 88,000 for the year ended December 31, 2024, from CAD 1,084,000 in 2023[135]. - Total comprehensive loss for the year ended December 31, 2024, was CAD (20,267) thousand, a 4% improvement compared to CAD (21,146) thousand in 2023[87]. Production and Operations - The average daily sales volume for the year was 631 barrels of oil equivalent per day, down 62% from 1,676 barrels in 2023[10]. - Natural gas production was temporarily halted from May to October 2024 due to weak commodity prices, with production resuming in November[14]. - The average daily production of natural gas was 3,295 million cubic feet per day in 2024, down from 9,053 million cubic feet per day in 2023[10]. - The total production of oil equivalent decreased to 617 barrels per day in 2024, a decline of 62.5% from 1,646 barrels per day in 2023[53]. - The company expects to resume full natural gas production by the end of January 2025, anticipating a recovery in natural gas prices[59]. - The company plans to fully resume production by January 2025 and maintain maximum output throughout the year, anticipating a rise in natural gas commodity prices[15]. - The total proven reserves as of December 31, 2024, were 3.538 million barrels of oil equivalent, a decrease from 3.800 million barrels in 2023[12]. - The company's total production has been declining over the past five years, with a significant drop in natural gas production due to historical low prices and operational shutdowns[54]. Assets and Liabilities - Total assets decreased to CAD 25.888 million in 2024 from CAD 35.508 million in 2023[9]. - Net debt increased to CAD 47,815 thousand as of December 31, 2024, compared to CAD 37,387 thousand in 2023, reflecting a significant rise in financial obligations[91]. - The company's asset-to-debt ratio increased to 181% in 2024 from 117% in 2023, indicating a higher level of leverage[91]. - As of December 31, 2024, the company's working capital deficit was CAD 16.3 million, with total borrowings from the CMG and Jixing loans fully drawn at $11.5 million[98]. Financing and Capital Expenditures - The company completed a share placement, issuing 63 million shares at prices of HKD 0.22 and HKD 0.24, raising a total of CAD 2.5 million[14]. - The company issued convertible bonds amounting to USD 1.6 million, approximately CAD 2.18 million, with a 12% interest rate[14]. - The company signed a CAD 1.5 million convertible bond agreement with a 9% annual interest rate, maturing on December 10, 2025[48]. - Capital expenditures for 2024 were CAD 119,000, significantly lower than CAD 538,000 in 2023[53]. - The company is actively seeking additional financing opportunities, including alternative debt arrangements and joint ventures, to improve liquidity and manage capital expenditures[131]. Strategic Initiatives and Market Expansion - The company plans to enter two new markets in Asia by the end of 2025, aiming to increase its market share by 20%[42]. - The company is investing CAD 5 million in new product development, focusing on renewable energy technologies[42]. - The company recognizes the growing global demand for liquefied natural gas and cryptocurrency mining, leveraging natural gas for power generation in mining projects[16]. - The company aims to maximize future returns by maintaining a strategy of retaining production reserves to balance any revenue losses due to commodity price fluctuations[15]. Governance and Corporate Culture - The board has established a framework for identifying and managing key risks, with annual reviews of the internal control system's effectiveness[129]. - The company’s internal controls over financial reporting (ICFR) were deemed effective as of December 31, 2024, with no significant changes impacting financial reporting controls[128]. - The board consists of five directors, including two executive directors and three independent non-executive directors, ensuring compliance with listing rules regarding independent director appointments[151]. - The company has established a corporate culture framework that emphasizes operational efficiency and effective well layout and field development to create shareholder value[148]. - The board has delegated daily management and operational responsibilities to senior management while overseeing strategic decisions and business performance[149]. Environmental and Social Responsibility - The company aims to achieve carbon neutrality by 2030, aligning with global sustainability goals[42]. - The company is committed to transparent and responsible operations in the communities where it operates, amidst increasing scrutiny on hydraulic fracturing technology[133]. - The company is facing potential increased costs due to new environmental regulations affecting the oil and gas industry, which may impact operations[133]. Employee and Director Compensation - The total employee compensation for the year ending December 31, 2024, was CAD 1 million, including CAD 390,000 in severance pay, compared to CAD 1 million in 2023[124]. - The remuneration for the CEO is set at CAD 330,000 (approximately HKD 1,914,153) annually, determined by the board based on various factors[167]. - Personnel costs increased by 32% year-over-year to $904,000, while board fees rose by 77% to $154,000[75]. Audit and Risk Management - The Audit and Risk Committee held four meetings during the year ending December 31, 2024, with attendance as follows: Chairman Hong Jiaxi (4/4), Kong Zhanpeng (0/4), Larry Grant Smith (4/4), and Chairman Du Jiewen (0/0)[195]. - The committee reviewed the company's final performance for the fiscal year and the audit report prepared by the external auditor regarding key accounting issues and findings during the audit process[199]. - The company has appropriate arrangements for employees to confidentially raise concerns about potential misconduct in financial reporting and internal controls[199].

Financial Performance - For the year ended December 31, 2024, JX Energy Ltd. reported total revenue of CAD 4,901,382, a decrease of 60.7% compared to CAD 12,456,451 in 2023[9]. - JX Energy Ltd. incurred a net loss of CAD 20,267,110 for the year, compared to a loss of CAD 21,146,164 in the previous year, reflecting a 4.1% improvement[9]. - JX Energy Ltd. reported a basic and diluted loss per share of CAD 0.04 for 2024, compared to CAD 0.05 in 2023, indicating a 20% improvement[9]. - The company reported a net loss of C$20,267,110 for the year ended December 31, 2024, compared to a net loss of C$21,146,164 in 2023, indicating a slight improvement in performance[11]. - The company reported a net loss of CAD 8.777 million in Q4 2024, compared to a net loss of CAD 14.235 million in Q4 2023[186]. - Total revenue for the three months ended December 31, 2024, was CAD 1,179 thousand, down 63% from CAD 3,160 thousand in the same period of 2023[194]. Assets and Liabilities - The company's total assets decreased to CAD 25,888,120 in 2024 from CAD 35,507,629 in 2023, representing a decline of 27.4%[6]. - Total liabilities increased to CAD 47,349,095 in 2024 from CAD 41,007,614 in 2023, marking an increase of 15.9%[6]. - Shareholders' equity decreased to CAD (21,460,975) in 2024 from CAD (5,499,985) in 2023, reflecting a decline of 289.5%[7]. - The company has a working capital deficit of C$16,300,000 as of December 31, 2024, which raises concerns about its ability to meet short-term obligations[19]. - Total financial liabilities amounted to C$17,400,000, with a significant portion due within one year, highlighting liquidity challenges[19]. - As of December 31, 2024, total financial liabilities amounted to CAD 50.67 million, with CAD 17.41 million due within one year[157]. Cash Flow and Investments - The company's cash and cash equivalents decreased to CAD 211,491 in 2024 from CAD 363,305 in 2023, a decline of 41.7%[6]. - The company experienced a cash outflow from operating activities totaling C$2,736,397, a decrease from a cash inflow of C$4,098,024 in 2023[11]. - The company reported a net cash used in investing activities of C$1,332,812, an improvement from a net cash outflow of C$3,652,728 in the previous year[11]. - The company generated C$1,900,000 from the sale of exploration and evaluation assets, a notable increase from C$121,576 in 2023[11]. Operational Performance - The ongoing geopolitical issues and market volatility have significantly impacted the company's operational performance, particularly in natural gas pricing[19]. - The company plans to resume full natural gas production by the end of January 2025, following a temporary shutdown due to low prices[188]. - The average daily production of natural gas was 3,746 cubic feet per day, a decrease of 58% compared to Q4 2023[186]. - The total production in Q4 2024 was 685 barrels of oil equivalent per day, down 58% from 1,633 barrels in Q4 2023[191]. Revenue and Sales - Total revenue from product sales for the year ended December 31, 2024, was CAD 4,968,093, a decrease of 63.4% from CAD 13,560,585 in 2023[118]. - Natural gas trading revenue for 2024 was CAD 58,235, down 62.7% from CAD 155,855 in 2023, with trading costs also decreasing significantly[118]. - The largest customer accounted for 62% of total revenue in 2024, generating CAD 3,100,000, compared to 68% and CAD 9,200,000 in 2023[120]. Impairments and Write-offs - Impairment losses totaled CAD 4,471,173 for the year ended December 31, 2024, down from CAD 10,387,644 in 2023[122]. - The company identified no impairment indicators for cash-generating units (CGUs) related to exploration and evaluation (E&E) assets as of December 31, 2024[123]. - The company recognized a CAD 6,900,000 impairment loss for Basing CGU and a CAD 590,000 recovery for Voyager CGU as of December 31, 2023[126]. Financing and Debt - The company issued shares for cash amounting to CAD 2,540,956 during the year, contributing to its capital structure[10]. - A new convertible bond agreement has been signed with an independent third party, set to repay $1.5 million by March 2025[21]. - The company has a total of CAD 20,696,153 in long-term payables as of December 31, 2024, an increase of 55.8% from CAD 13,286,657 in 2023[101]. - The company incurred an additional CAD 8.2 million in expenses related to the Jixing GHCA, compared to CAD 5.1 million in 2023[102]. Management and Governance - The company continues to assess its ability to operate as a going concern, considering various business risks and uncertainties[75]. - The company did not declare any dividends for the years ended December 31, 2024, and 2023[146]. - The total compensation for independent non-executive directors, including shadow unit plan expenses, amounted to CAD 500,000 for the year ended December 31, 2024[4]. Accounting Policies and Estimates - The company consistently applies important accounting policies across all reported years[23]. - Significant sources of estimation uncertainty include reserve estimates, which require assumptions about production profiles, commodity prices, and future cash flows, potentially affecting the carrying value of oil and gas properties[71]. - The company assesses impairment indicators for non-financial assets at each reporting date, considering both external and internal information that may impact asset values[70].

Financial Performance - Production revenue for Q2 2024 was CAD 715,000, a decrease of 70% compared to CAD 2,391,000 in Q2 2023[10]. - Total revenue for the six months ended June 30, 2024, decreased by 45% to CAD 3,555,000 compared to CAD 6,423,000 in the same period of 2023[28]. - The company reported a net loss of CAD 7,277,834 for the six months ended June 30, 2024, compared to a loss of CAD 4,062,151 for the same period in 2023, reflecting an increase in losses of approximately 79.5%[122]. - The company reported a significant increase in accounting, legal, and consulting fees due to expenses related to equity financing[38]. - The company experienced a significant drop in trading revenue, with natural gas trading income falling by 97% to CAD 3,000 for the three months ended June 30, 2024[28]. - The company reported an operating net loss of CAD 2,533,000 for the three months ended June 30, 2024, compared to a loss of CAD 447,000 for the same period in 2023, representing a 467% increase in losses[90]. - Adjusted EBITDA loss increased by 287% to CAD 2,755,000 for the three months ended June 30, 2024, compared to a loss of CAD 712,000 for the same period in 2023[91]. Production and Sales - Average daily sales volume decreased by 78% to 283 barrels per day in Q2 2024 from 1,305 barrels per day in Q2 2023[10]. - Total production (in oil equivalent) dropped to 280 barrels/day in Q2 2024, down from 1,461 barrels/day in Q1 2024, a decrease of about 81%[18]. - The average daily production of natural gas decreased to 1,361 cubic feet/day in Q2 2024 from 8,030 cubic feet/day in Q1 2024, representing a decline of approximately 83%[18]. - Production revenue fell by 70% to CAD 715,000 for the three months ended June 30, 2024, compared to CAD 2,391,000 for the same period in 2023[90]. - Oil production decreased by 43% to 36 barrels per day for the three months ended June 30, 2024, due to reduced production days from maintenance and repairs[27]. Assets and Liabilities - Total assets as of June 30, 2024, were CAD 31,340,000, down from CAD 35,446,000 in 2023[11]. - Total liabilities decreased to CAD (40,557,000) in June 2024 from CAD (45,056,000) in 2023[11]. - The company's total equity was CAD (9,217,000) as of June 30, 2024, compared to CAD (9,610,000) in 2023[11]. - Long-term debt as of June 30, 2024, was 8,173 thousand CAD, down from 11,553 thousand CAD as of December 31, 2023[50]. - The company's net debt stood at 37,874 thousand CAD as of June 30, 2024, compared to 37,387 thousand CAD at the end of 2023[50]. Cash Flow and Financing - The company has a working capital deficit of C$13.3 million as of June 30, 2024, with total long-term debt of C$1.15 million drawn from new loans[56]. - The company reported a total of C$1,900,000 in cash generated from the sale of exploration and evaluation assets during the six months ended June 30, 2024[124]. - Operating cash flow for the six months ended June 30, 2024, was negative at C$4,804,180, compared to a positive cash flow of C$3,047,699 for the same period in 2023[124]. - The company secured PSG financing of C$1.55 million from EDC, allowing it to provide guarantees for letters of credit without holding cash[53]. - The company has secured new long-term debt of US$8 million, with a monthly payment obligation of US$200,031 and US$87,514 for the respective loans[56]. Market Conditions and Risks - Management has indicated that future results may differ significantly from current projections due to various risks and uncertainties[13]. - The company faces significant uncertainty due to global market volatility, which may impact its operational and financing capabilities[57]. - The average natural gas price in Western Canada is expected to remain around the 2023 average, with fluctuations due to market conditions[17]. - The company recorded a significant impact on its operational performance due to fluctuations in natural gas prices, influenced by geopolitical factors and supply chain disruptions[128]. Shareholder Information - The company issued 33,000,000 common shares in May 2024, raising total proceeds of CAD 1.26 million[17]. - The company has not declared any dividends for the three and six months ended June 30, 2024, and 2023[68]. - As of June 30, 2024, the total number of shares issued by the company is 522,886,520[105]. - The company has a stock option plan that allows for the issuance of options up to 10% of the total issued common shares[157]. Compliance and Governance - The company adopted all applicable new and revised International Financial Reporting Standards (IFRS) effective from January 1, 2023, for the financial statements for the three and six months ended June 30, 2024[83]. - The internal controls over financial reporting (ICFR) were designed to ensure the protection of assets and the reliability of financial information, with no significant changes affecting the ICFR during the reporting period[84]. - The audit and risk committee, composed of three independent non-executive directors, reviewed the interim results for the three and six months ended June 30, 2024[99].

Financial Performance - JX Energy Ltd. reported a net revenue of CAD 2,799,435 for the three months ended March 31, 2024, a decrease of 18.5% compared to CAD 3,436,338 in the same period of 2023[8]. - The company's operating loss for the same period was CAD 2,485,297, compared to a loss of CAD 1,703,263 in the previous year, reflecting an increase in operational challenges[8]. - For the three months ended March 31, 2024, the net loss was CAD 3,429,736, compared to a net loss of CAD 2,096,417 for the same period in 2023, indicating an increase in losses of approximately 63.5%[12]. - Total revenue for the three months ended March 31, 2024, was CAD 2,827,452, a decrease of 30% compared to CAD 4,041,170 for the same period in 2023[56]. - The company reported a total loss and comprehensive loss of CAD 3,430,000 for the three months ended March 31, 2024, a 64% increase compared to CAD 2,096,000 in the same period of 2023[130]. Assets and Liabilities - Total assets as of March 31, 2024, were CAD 34,722,102, a decrease from CAD 35,507,629 as of December 31, 2023[7]. - Current liabilities decreased to CAD 14,421,007 from CAD 15,190,661, indicating improved short-term financial management[7]. - The company’s total liabilities increased to CAD 41,806,001 from CAD 41,007,614, suggesting a rise in long-term obligations[7]. - Shareholders' equity as of March 31, 2024, was CAD (7,083,899), a decline from CAD (5,499,985) as of December 31, 2023, reflecting ongoing financial pressures[7]. - Long-term debt totaled CAD 15,049,634 as of March 31, 2024, slightly down from CAD 15,082,539 as of December 31, 2023[38]. Cash Flow and Financing - Cash and cash equivalents increased to CAD 459,253 from CAD 363,305, indicating a positive cash flow trend[7]. - Total cash generated from operations was CAD 40,634, a significant decrease from CAD 1,636,288 in the previous year, reflecting a decline of approximately 97.5%[12]. - The company issued shares for cash totaling CAD 1,278,093 during the reporting period, contributing to its capital structure[10]. - The company raised CAD 1,280,000 by issuing 30,000,000 common shares in February 2024[100]. - The company raised a total of CAD 1.25 million from the March 2024 subscription plan, with 100% allocated for general working capital, and no funds utilized as of March 31, 2024[143]. Operational Efficiency - JX Energy Ltd. continues to focus on operational efficiency and cost management strategies to navigate the challenging market environment[8]. - The operating working capital deficit as of March 31, 2024, was CAD 12 million, with an operating loss of CAD 1.7 million for the three months[17]. - The company incurred CAD 2.3 million in expenses related to Jixing Energy GHCA as of March 31, 2024, with a current period adjustment of $570,000[44]. - The company reported an operating net value of CAD (857,000), a decline of 415% from CAD 272,000 in the previous year[179]. - The company has a liquidity gap of 12,177 thousand CAD as of March 31, 2024, compared to 10,460 thousand CAD in the previous year, indicating increased operational funding needs[134]. Market Conditions and Production - Natural gas and LNG sales amounted to CAD 2,521,518, down 28% from CAD 3,503,494 in the previous year[56]. - The average market price for natural gas (AECO) dropped by 36% to CAD 2.03 per cubic foot in Q1 2024 compared to CAD 3.18 in Q1 2023[115]. - The average sales price for natural gas decreased by 24% to CAD 2.52 per cubic foot in Q1 2024, reflecting the impact of warmer temperatures on pricing[115]. - The company's total production was impacted by seasonal fluctuations in Western Canada, with natural gas demand peaking in winter months, leading to historically stronger revenues in Q1 and Q4, while Q2 and Q3 are typically weaker[105]. - Natural gas production decreased by 20% to 8,030 cubic feet per day in Q1 2024, while oil production fell by 31% to 41 barrels per day[109]. Financial Management and Governance - The company is actively seeking additional financing opportunities, including alternative debt arrangements and capital restructuring, to manage its expenditures and leverage[173]. - The company has adopted all applicable new and revised International Financial Reporting Standards effective from January 1, 2023, for the preparation of financial statements[167]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[182]. - The company has established a framework for identifying and managing key risks, with ongoing monitoring of its internal control systems[172]. - The company has implemented disclosure controls and procedures to ensure that important information is recorded and reported within the regulatory deadlines[169]. Regulatory and Environmental Compliance - The company faces potential adverse impacts from changes in government regulations, policies, and tax systems that could affect its operations[174]. - Compliance with environmental legislation may require significant expenditures, and violations could lead to penalties and loss of necessary permits[175]. - The company is committed to conducting transparent and responsible business practices in the communities where its employees live and work[177].

Financial Performance - Total production revenue for 2023 was CAD 13.561 million, a decrease of 49% from CAD 26.802 million in 2022[17]. - The company reported a net loss of CAD 21.146 million for 2023, compared to a loss of CAD 3.579 million in 2022[10]. - Operating netback for 2023 was CAD (1.496) million, a significant decline from CAD 9.461 million in 2022[10]. - The company reported a total revenue of CAD 3,160 thousand for the three months and CAD 13,541 thousand for the year, reflecting a decrease of 52% and 50% respectively compared to 2022[74]. - The annual loss for the year ended December 31, 2023, was CAD 21.1 million, highlighting financial challenges faced by the company[166]. Production and Sales - Average daily sales volume decreased by 55% to 1,676 barrels of oil equivalent per day in 2023 from 3,725 barrels in 2022[7]. - Total production in 2023 was 1,646 barrels of oil equivalent per day, a decrease of 9.1% compared to 1,810 in 2022[55]. - The company experienced a 30% production decline during Q2 2023 due to forest fires, impacting overall annual sales[65]. - Production revenue for 2023 was CAD 13,561,000, a significant drop of 49.5% from CAD 26,802,000 in 2022[55]. - The total sales volume for the year ended December 31, 2023, decreased by 10% compared to the previous year, primarily due to natural declines and production interruptions[69]. Assets and Liabilities - Total assets decreased to CAD 35.508 million in 2023 from CAD 52.399 million in 2022[8]. - Total liabilities amounted to CAD (41.008) million in 2023, down from CAD (43.721) million in 2022[8]. - The company’s net working capital as of December 31, 2023, was CAD (13,120,000), a decrease from CAD (36,968,000) in 2022[55]. - The company's total capital as of December 31, 2023, was CAD 31,887,000, down from CAD 47,164,000 in 2022[106]. - As of December 31, 2023, the company's current liabilities exceeded its current assets by CAD 13.1 million, indicating significant uncertainty regarding its ability to continue as a going concern[166]. Capital Expenditures and Financing - Capital expenditures for 2023 were CAD 538,000, significantly lower than CAD 6.175 million in 2022[10]. - The company raised CAD 1.9 million through private placements in 2023 to reduce outstanding debt related to the 2022 drilling program[53]. - The company plans to issue 33 million shares at a price of HKD 0.22 per share, raising a total of HKD 72.6 million (CAD 1.2 million) in 2024[18]. - The company secured new long-term debt through a $8 million shareholder loan and a $3.5 million loan from CIMC Leasing USA, with both loans having a term of 48 months and an annual interest rate of 9.25%[116]. - The company is actively seeking additional financing opportunities to manage its capital expenditures and leverage, including alternative debt arrangements and joint ventures[156]. Operational Challenges - The company faced significant uncertainty due to global factors such as the Ukraine conflict, climate change, and supply chain disruptions, which have notably impacted natural gas prices and operational performance[117]. - The company aims to maintain its production reserve strategy to balance any short-term revenue losses due to commodity price fluctuations, maximizing future returns[18]. - The company faces potential increased costs and operational challenges due to evolving environmental regulations in the oil and gas industry[159]. - The company has significant uncertainty regarding its ability to continue as a going concern, dependent on generating positive cash flow from operations and securing financing[117]. Management and Governance - The management team includes experienced professionals with extensive backgrounds in finance, engineering, and operations, enhancing the company's strategic capabilities[37][39][43]. - The company has appointed independent directors and has a structured board with various committees to oversee financial and operational risks[33]. - The roles of the chairman and CEO are separated, with Mr. Liu serving as chairman and Mr. Wang as CEO, although Mr. Liu will temporarily assume both roles starting February 14, 2024[197]. - The board consists of two executive directors and three independent non-executive directors, ensuring a reasonable structure and power balance[199]. - The company has not yet established measurable diversity targets for the board as of December 31, 2023, but will consider stakeholder expectations and best practices[188]. Forward-Looking Statements and Risks - The company emphasizes that certain statements in the MD&A are forward-looking and involve significant risks and uncertainties, which could lead to actual results differing materially from those projected[46]. - Investors are cautioned not to overly rely on any forward-looking statements, as actual results may vary significantly due to various factors beyond the company's control[47]. - Significant changes in risk factors and the company's ability to respond to business and external environment changes have been monitored by management[158]. - The company has a strong focus on resource and reserve statements, which are also considered forward-looking due to their reliance on estimates and assumptions regarding future production and profitability[47]. Employee and Compensation - The total employee compensation for the year ended December 31, 2023, was CAD 1 million, down from CAD 1.5 million in 2022[149]. - The company had a total of 5 employees as of December 31, 2023, down from 6 employees in 2022[149]. - The company’s G&A costs included capitalized employee costs of CAD 60,000 for the three months and CAD 286,000 for the year, reflecting a decrease of 32% and 19% respectively[88]. Miscellaneous - The company has not declared dividends for the years ending December 31, 2023, and 2022[133]. - The company has not engaged in any off-balance sheet transactions during the periods ending December 31, 2023, and 2022[137]. - The company has pledged all assets to support its debt arrangements, with no other collateral in place[138]. - The company’s financial statements have been audited and found to fairly present its financial position as of December 31, 2023[165].