LGO reported that the loss of Well 678 could amount to approximately US$4 million. Nevertheless, LGO continues to meet its payment commitments to BNP Paribas as planned.
The company is now looking at several options to bridge the funding gap that the loss has created. This includes the appointment of Wellford Capital Markets LLC and Height Securities to jointly advise on strategic investments int he business. both will be retained for a period of 3 months and will work with the management to define options for longer sustainability, including sourcing strategic investors and the possible refinancing of the existing bank loan.
Operations at Goudron Field will continue with operating costs continuing to be met from production revenue, funds held by LGO and those being released by the bank.
Production in Spain improved to 186 bopd after well cleanout works in the summer. group production currently stands at 896 bopd due to continuing depletion in the field and slowing of work on the Gourdon Sandstone programme.
No doubt the setback had dealt a cruel blow to LGO's ambitions, but with more than 800 million of oil in place, it is just a matter of getting the funding going again to get production moving. I remain cautiously optimistic that LGO will get its act together, and with the eventual increase in oil price int he coming months, this setback will a thing of the past. still investing in UK AIM stocks is a high risk affair and it is important that you do your own due diligence.
My disclosure: I own LGO shares.
No comments:
Post a Comment