Following the recent decision of the Western Cape High Court in the Republic of South Africa to set aside an environmental authorization for the offshore exploration operations in Block 5/6/7 (held by unrelated parties), we have taken the prudent step of pausing our Environmental and Social Impact Assessment ("ESIA) report for Block 11B/12B1, offshore South Africa. This allows us to fully assess the implications of the new legal and regulatory landscape and ensure our ESIA application and development plans are optimally aligned. Concurrently, our technical team continues to advance technical work on various development scenarios. This parallel path ensures we will be ready to proceed with the requisite amendments to the ESIA report once our legal and regulatory review is finalized. As a consequence of the above, an extension to our ESIA report has been granted by the Petroleum Agency of South Africa to May 2026.
HIGHLIGHTS
At September 30, 2025, the Company had US$3.8 million in cash, US$3.7 million of working capital and no debt compared to US$2.3 million in cash, US$8.2 million of working capital deficiency and US$10.4 million promissory note debt obligations at the end of 2024. In addition, Main Street 1549 Proprietary Limited ("Main Street 1549") had US$2.2 million of cash at September 30, 2025.
OUTLOOK
The Company is focused on obtaining environmental authorization for development of discovered resources in Block 11B/12B so that it can obtain the Production Right approval. Early engagements with relevant stakeholders on gas supply has commenced in an effort to secure offtake customers for future development.
Subject to all relevant regulatory approvals by South African authorities with respect to the withdrawal of the joint venture partners in Block 11B/12B and completion of the restructuring of Main Street 1549, the Company expects to hold 75% direct interest in Block 11B/12B. Despite the challenges and delays encountered so far, the Company remains confident that the Block 11B/12B resources can be commercially developed. The Brulpadda and Luiperd discoveries are the largest discoveries of natural gas resources in South Africa and if developed could supply a significant portion of the country's energy needs required to achieve both sustainable economic growth and the transition to lower carbon energy sources.
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1 Main Street 1549 currently holds a 10% participating interest in Block 11B/12B, offshore South Africa. The Company currently owns 49% of the common shares and 100% of the Class B shares of Main Street 1549.
FINANCIAL INFORMATION(Unaudited; thousands, except per share amounts, US dollars)
Three
Three
Nine
Nine
Months
Months
Months
Months
Ended
Ended
Ended
Ended
Sept. 30,
Sept. 30,
Sept. 30,
Sept. 30,
2025
2024
2025
2024
Operating expenses
327
27,549
1,479
98,971
