Jericho Energy Ventures : Financial Report Q4 2020

JERICHO ENERGY VENTURES INC.

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

December 31, 2020 and 2019

INDEPENDENT AUDITOR'S REPORT

To the Shareholders and the Board of Directors of

Jericho Energy Ventures Inc. (formerly Jericho Oil Corporation)

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Jericho Energy Ventures Inc. and its subsidiaries (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2020 and 2019, and the consolidated statements of comprehensive loss, changes in equity and cash flows for the years ended December 31, 2020 and 2019, and the related notes, including a summary of significant accounting policies and other explanatory information (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

Management is responsible for the other information, which comprises the information included in the Company's Management Discussion & Analysis to be filed with the relevant Canadian securities commissions.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

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Auditors' Responsibilities for the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditors' report is Fernando J. Costa.

/s/ Manning Elliott LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, British Columbia

April 28, 2021

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Jericho Energy Ventures Inc.

(Formerly Jericho Oil Corporation)

Consolidated Statements of Financial Position

(Expressed in Canadian dollars)

	Note	December 31, 2020	December 31, 2019
Assets
Current assets
Cash		$	3,543,176	$	1,579,451
Accounts receivable			3,025		23,182
Prepaid expenses and deposits			12,495		11,617
			3,558,696		1,614,250
Non-current assets
Petroleum properties	5		192,452		528,103
Other assets			6,375		15,876
Equity investments	6		15,898,613		31,943,969
			16,097,440		32,487,948
Total assets		$	19,656,136	$	34,102,198
Liabilities
Current liabilities
Accounts payable and accrued liabilities		$	403,568	$	520,371
Non-current liabilities
Decommissioning liabilities	7		76,538		150,578
Loans			64,276		-
Total liabilities		$	544,382	$	670,949
Shareholders' Equity
Share capital	9		55,283,682		50,515,082
Treasury shares	9		(74,808)		(74,808)
Contributed surplus			3,612,825		2,630,908
Accumulated other comprehensive income			1,308,774		1,250,786
Deficit			(41,018,719)		(20,890,719)
			19,111,754		33,431,249
Total liabilities and shareholders' equity		$	19,656,136	$	34,102,198
See Subsequent events - Note 16 for further information.
Approved on behalf of the Board on April 28, 2021
"Brian Williamson"			"Ben Holman"

(The accompanying notes are an integral part of the consolidated financial statements)

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Jericho Energy Ventures Inc.

(Formerly Jericho Oil Corporation)

Consolidated Statements of Comprehensive Loss

(Expressed in Canadian dollars)

				Year Ended
	Note		December 31, 2020	December 31, 2019
Net crude oil revenue		$	55,550	$	237,649
Operating expenses
Production costs				87,694		239,791
Depletion, depreciation and amortization				23,737		115,680
Accretion of decommissioning liabilities	7			4,397		4,350
General and administrative expenses	8			2,715,935		1,947,397
Foreign exchange loss				219,261		95,051
Total operating expenses				3,051,024		2,402,269
Share of loss from equity investments	6			(16,742,413)		(6,342,531)
Operating loss				(19,737,887)		(8,507,151)
Other income (loss)
Interest income				-		160
Other income				12,393		6,662
Impairment of petroleum properties				(402,506)		(29,190)
				(390,113)		(22,368)
Loss for the year				(20,128,000)		(8,529,519)
Other comprehensive loss
Items may be reclassified subsequently to income/loss
Foreign currency exchange loss on translation of foreign
subsidiary				57,988		(1,797,009)
Comprehensive loss		$	(20,070,012)	$	(10,326,528)
Loss per common share
Basic		$	(0.13)	$	(0.07)
Diluted
Weighted average number of common shares
Basic and diluted				156,476,994		128,638,978

(The accompanying notes are an integral part of the consolidated financial statements)

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