New Times Energy Corporation Limited (Stock code: 00166.HK), headquartered in Hong Kong and traded on The Stock Exchange of Hong Kong, is principally engaged in exploration, development, production and sale of natural resources, as well as general and commodities refinery and trading. We are located in Canada, Argentina and Hong Kong. We strive to establish sustainable growth and value for shareholders by capitalising on the expertise, experience and dedication of our management team and staffs.
VISION & MISSION
We develop energy for the new times. Diversify for climate change and the environment.
On behalf of the Board of Directors (the “Board”) of New Times Energy Corporation Limited (“New Times Energy”) and its subsidiaries (collectively, the “Group”), I hereby present the annual results and audited consolidated financial statements of the Group for the year ended 31 December 2022.
OVERVIEW OF 2022
New Times Energy is pleased to report an annual profit of HK$285.9 million for 2022 (2021: HK$329.4 million). The strong performance was mainly attributable to the Group’s Canadian oil and gas business, comprising of over 800 active wells, producing approximately 11,500 barrels of oil equivalent (“boe”) per day (95% natural gas), and robust energy commodity prices during the former part of the year.
With the successful drilling and completion of six unconventional wells operated by the Group in 2022, a minority participation in an additional three unconventional wells, together with the optimization program initiated at the end of the previous year, the Group’s overall production in Canada increased by approximately 1,150 boe per day as of early 2023.
Recent global events have demonstrated that the demand for stable energy sources like oil and gas will remain strong for the near to medium term. The Group is confident its Canadian oil and gas business will continue to contribute sizeable positive cashflows in the years ahead while being mindful of exploring ways in which to work with local authorities and governing bodies to achieve the common goal of net zero emissions.
As the world accelerates towards a low carbon economy, New Times Energy is embarking on its own energy transition journey. Plans to redevelop and transform the Group’s 1,200 acres (4.9 km2) Discovery Park site at Campbell River, British Columbia from a former pulp mill into a green ecosystem hub powered by hydroelectricity have already commenced.
GREEN ECOSYSTEM HUB POWERED BY SUSTAINABLE ENERGY
The Group is in negotiations with three significant organisations to accommodate the following facilities at Discovery Park:
- An inland aquaculture facility,
- Hosting a liquid hydrogen plant capable of producing 60 tonnes of hydrogen daily, and
- Building a renewable natural gas facility to utilise the abundant supply of biomass in the vicinity.
The Group has entered in letters of intent with all three propositions, and negotiations and feasibility studies are ongoing with the prospective tenants. The Group is also initiating its own vertical farming and modular construction manufacturing facilities to create a circular economy at Discovery Park.
Figure 1: Illustration of the Green Ecosystem Hub at Discovery Park
Modular construction will provide on-site building materials to all 4 industries while secondary outputs are recycled as such:
- Excess heat and oxygen from the hydrogen fuel plant are reused in Aquaculture operations,
- Fish sludge is a suitable biomass feedstock for the renewable natural gas facility, and
- Carbon dioxide and excess heat from the production of renewable natural gas can be reused in vertical farming operations.
By redeveloping Discovery Park into a green ecosystem hub, the Group can create economic value by reducing waste, and contribute to better sustainability, climate protection and resource efficiency.
During 2022, oil production at the Group’s Argentinean concession was increased to approximately 1,350 barrels per day. Argentina remains a challenging country to operate because of factors such as lower domestic oil prices, hyperinflation, currency devaluation, capital controls, bureaucracy, and labour union unrest. However, the Group’s exposure in Argentina is less than 2% of its total net assets.
New Times Energy’s commodities trading business (in particular its physical gold and silver trading) continued to perform solidly during the year, albeit net margin was impacted by the delayed opening of the Group’s new precious metals refinery. With the latest operational date anticipated to be the second quarter of 2023, the Group is optimistic that the new refining process will positively contribute to the Group’s future profitability.
New Times Energy is mindful of the increasing global trend and appetite for low carbon economy, particularly in the developed economies. While our principal business is that of oil and gas exploration and production, the Group is already taking steps to transform its business model into one that increasingly focuses on social responsibility and a viable path to net zero emissions by developing Discovery Park into a green ecosystem hub.
New Times Energy continues to actively manage and structure its business to best serve the interests of its shareholders. It is committed to maximising shareholder value by exploring and developing oil and gas prospects in a safe, environmentally, socially and ethically responsible manner. Environmental and sustainability considerations will continue to play an increasingly key role in the way the Group conducts its future business.
The Group understands the need to continually reassess and diversify its current business and geographical portfolio to better position itself for the future. It is also critical that the Group continues to maintain a healthy cash position to enable it to actively seek out value adding and complementary investment opportunities in the energy sector, wherever that may be in the world.
In closing, I would like to take this opportunity to express my sincerest gratitude to the Board, the management team, and all staff for your efforts and dedication during the year. I am also much obliged to our shareholders, investors, business partners, bankers, customers and suppliers for your continued and invaluable support.
CHENG, Kam Chiu Stewart
Hong Kong, 21 March 2023
|Executive Directors and Senior Management
|Independent Non-executive Directors
|Mr. CHENG Kam Chiu, Stewart
Mr. TANG, John Wing Yan
|Mr. LEE Chi Hin, Jacob
|Mr. YUNG Chun Fai, Dickie
Mr. CHIU Wai On
Mr. HUANG, Victor
EXECUTIVE DIRECTORS AND SENIOR MANAGEMENT
Mr. CHENG Kam Chiu, Stewart (Chairman and Executive Director)
Mr. CHENG, Kam Chiu Stewart, aged 69, was appointed as an executive Director in February 2008 and the Chairman in May 2009. Mr. Cheng holds a Bachelor’s degree in Civil and Environmental Engineering from the University of Wisconsin-Madison, the United States of America (“USA”); a Master’s degree in Civil Engineering from the University of California, Berkeley, USA; and a Master’s degree in Business Administration from the Chinese University of Hong Kong. Being a member of The Hong Kong Institution of Engineers, Mr. Cheng is a professional engineer with extensive experience in property development and construction management.
Mr. Cheng joined Hip Hing Construction Company Limited in 1984 as a project manager and was subsequently appointed as director.From 1993 to 1997, Mr. Cheng was transferred to New World Development (China) Limited as a director and an assistant general manager, overseeing property development in the People’s Republic of China (“PRC”). He was a director of NWS Service Management Limited from 1997 to 2006, and was mainly responsible for the construction and the electrical and mechanical engineering businesses and pursuing business opportunities in the PRC. Mr. Cheng is the managing director of Cheung Hung Development (Holdings) Limited, principally engaging in property development in both Hong Kong and the PRC. He was an executive director of International Entertainment Corporation from January 2008 to June 2017, which shares are listed on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
Mr. TANG, John Wing Yan (Executive Director and Chief Executive Officer)
Mr. TANG, John Wing Yan, aged 71, was appointed as an executive Director in June 2017. Mr. Tang joined the Group as general manager in August 2015. He brings with him over 20 years of senior management experience and has held top executive positions with various international companies prior to joining the Group.
Formally trained as a structural engineer, Mr. Tang was a Chartered Engineer in the United Kingdom (“UK”) as well as a Registered Professional Engineer in USA and Canada. Author and co-author of peer-reviewed publications in several technical journals and conferences, he is also the holder of U.S. Patent US6329589 pertaining to wireless transmission of solar power for exterior curtain wall in buildings.
Mr. Tang holds a Bachelor’s degree in Civil Engineering, Magna Cum Laude, from the University of Massachusetts, USA; a Master’s degree in Engineering from the University of California, Berkeley, USA; and a Graduate-Level Diploma in Financial Engineering from Stanford University, USA.
Mr. LEE Chi Hin, Jacob (Non-executive Director)
Mr. LEE, Chi Hin Jacob, aged 40, was appointed as a non-executive Director in March 2019. Mr. Lee is currently a senior vice president of Chow Tai Fook Enterprises Limited (“CTFE”) with responsibilities in making strategic and private equity investments globally. CTFE is an indirect subsidiary of Chow Tai Fook Capital Limited which is a controlling shareholder of the Company. Mr. Lee joined CTFE in March 2013 and has over 10 years of professional experience in corporate finance, investment, international capital markets and asset management. He previously worked at the investment banking department of The Hongkong and Shanghai Banking Corporation Limited and Deutsche Bank AG in Hong Kong. Mr. Lee holds a Master of Science degree in Accounting and Finance from The London School of Economics and Political Science to the University of London in London, United Kingdom and a Bachelor of Business Administration degree from the University of Michigan in Ann Arbor, United States of America. He is also a Chartered Financial Analyst Charterholder.
Mr. Lee is currently a non-executive director of Integrated Waste Solutions Group Holdings Limited (stock code: 923) and Giordano International Limited (stock code: 709) which shares are listed on the Stock Exchange and is also a member of the HKSAR Financial Reporting Review Panel.
INDEPENDENT NON-EXECUTIVE DIRECTORS
Mr. YUNG Chun Fai, Dickie (Independent Non-Executive Director)
Mr. YUNG, Chun Fai Dickie, aged 70, was appointed as an independent non-executive Director in March 2013. Mr. Yung holds a Master’s degree in Business Administration from the University of East Asia, Macau. He is a member of the Institute of Management and a fellow of the Chartered Management Institute. Mr. Yung has been engaged in finance and banking businesses for over 26 years. He was the chief executive officer of Landbridge Holdings Limited, the deputy chief executive officer of Industrial & Commercial Bank of China (Macau) Limited and an executive director, deputy general manager and alternate chief executive officer of Industrial & Commercial International Capital Limited (currently known as ICBC International Holdings Limited), a wholly-owned subsidiary of Industrial & Commercial Bank of China Limited.
Mr. CHIU Wai On (Independent Non-Executive Director)
Mr. CHIU, Wai On, aged 53, was appointed as an independent nonexecutive Director in November 2006. Mr. Chiu is a member of the Hong Kong Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants in the UK. He possesses extensive professional experience in accounting and auditing services. Mr. Chiu is currently an independent nonexecutive director of DeTai New Energy Group Limited(stock code: 559), whose shares are listed on the Stock Exchange.
Mr. HUANG, Victor (Independent Non-Executive Director)
Mr. HUANG, Victor, aged 51, was appointed as an independent non-executive Director in June 2020. Mr. Huang has over 28 years of experience in professional accounting, capital market and merger and acquisition. Mr. Huang joined PricewaterhouseCoopers Hong Kong in January 1993 and admitted to partnership in July 2005. He left PricewaterhouseCoopers Hong Kong in July 2014. From July 2014 to August 2017, he was a partner of KPMG in Hong Kong.
Mr. Huang is currently an independent non-executive director of (i) Laobaixing Pharmacy Chain Joint Stock Company (stock code: 603883.SH), a company listed on the Shanghai Stock Exchange; (ii) Qingdao Haier Biomedical Co., Ltd. (stock code: 688139.SH), a company listed on the Sci-Tech Innovation Board of the Shanghai Stock Exchange; and the following companies which are listed on transportation Co., Ltd. (stock code: 1138), (iv) Evergrande Property Services Group Limited (stock code: 6666), (v) ManpowerGroup Greater China Limited (stock code: 2180), (vi) Scholar Education Group (stock code: 1769) and (vii) Topsports International Holdings Limited (stock code: 6110). Mr. Huang was an independent nonexecutive director of Trinity Limited (stock code: 0891) from December 2018 to December 2020 and China Bright Culture Group (stock code: 1859) from February 2020 to November 2021.
Mr. Huang is a member of the Hong Kong Institute of Certified Public Accountants and The Hong Kong Independent Non-Executive Director Association. He is also a Certified Independent Nonexecutive Director by the Shanghai Stock Exchange. Mr. Huang received a bachelor’s degree of arts from the University of California, Los Angeles in September 1992.
As an oil and gas exploration and production industry participant, we are well-aware of the impacts and potential risks that our field operations pose to the environment and the surrounding ecosystem. We adopt best industry practices and guidelines in our management of the environmental risks arising from our operations in Canada and Argentina. We strictly comply with all relevant environmental laws and regulations in respective jurisdiction in which we operate in.
Our main emission sources are from diesel fuel, electricity, water and natural gas. With regards to emissions, our oil and gas businesses are strictly regulated under the respective Canadian and Argentine laws and regulations. Regulatory updates are continually monitored to ensure we remain compliant, and how potential amendments may impact operations.
We are committed to working closely with all stakeholders to decommission and reclaim inactive and non-producing wells to their original land use. A risk-based closure approach will be used to evaluate alternative remedial and reclamation options to reduce costs and expedite the closure of the dormant sites. This approach further allows us to identify more environmentally friendly ways to manage site reclamation activities.
We fully recognise our employees are our critical asset. Therefore, our policy is to hire and retain employees with professional skills that enable us to achieve our strategic objectives, in a non-discriminatory matter. Recruitment and compensation are based on qualification, experience, skills and performance. We offer competitive compensation and benefits packages in line with the local market rates for comparable roles and responsibilities in the industry.
We are proud to be an equal opportunity employer and believe in the fair treatment of all existing and prospective employees, regardless of their age, gender, marital status, family status, disability, pregnancy, nationality, ethnicity, sexual orientation, religion and culture, or any other discrimination prohibited by applicable law. We do not discriminate against or deprive of any opportunities in respect of recruitment, training and development, job advancement, and compensation and benefits. Our Codes of Ethic adopts a strict zero tolerance approach to any forms of discrimination or harassment in the workplace.
Critical to all oil and gas operations is rigorous and robust health & safety (“H&S”). We are committed to providing a safe and healthy working environment for our employees, and continuously promotes a strong H&S culture and mindset. We endeavour to adopt best practices in health and safety management and are strictly in compliance with all relevant laws and regulations governing H&S, in the jurisdictions we operate in.
We are committed to managing our business without undue influence, and in an open, honest and fair manner. All employees are required to strictly follow the Group’s Code of Ethics to prevent potential bribery, extortion, fraud and money laundering. Employees are regularly reminded about the Group’s anti-corruption policies and their need for strict adherence. Whistle-blowing procedures on misconduct and malpractice (including corruption) are also established in the Group’s anti-corruption policies.
Our board (the “Board”) of directors (the “Directors”) and management strive to attain and maintain high standards of corporate governance best suited to the needs of our businesses and interest and value of the shareholders of the Company (the “Shareholders”) as the Board believes that effective governance is essential to our competitiveness and to our healthy growth.
We have adopted and applied the principles of the code provisions of the Corporate Governance Code (the “CG Code”), including the amendments to the CG Code that came into effect on 1 January 2022, as set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The Board will continue to review and enhance our corporate governance practice to ensure compliance with the CG Code and align with the latest developments.
We have a board diversity policy which sets out the approach to diversify the Board. We seek to achieve Board diversity through consideration of a number of factors, including but not limited to gender, age, cultural and educational background, professional and industrial experience, skills, knowledge, length of service, and any other factors that the Board might consider relevant and applicable. The ultimate decision will be based on merit and contribution that the selected candidates will bring to the Board.
The Board is responsible for the leadership and control of the Company and collectively responsible for promoting success of the Company by directing and supervising the Company’s affairs. The Board also formulates objectives, overall corporate strategies and business plans, and oversees the financial and management performance of the Group.
The Board has a balanced composition of Executive and Non-executive Directors with each Director having sound knowledge, experience and expertise contributing to the performance and development of the Group. All Directors are aware of their collective and individual responsibilities to the Shareholders and have exercised their duties of care, skill and diligence.