17th Sep 2014 12:21
LONDON (Alliance News) - 3Legs Resources PLC said Wednesday that it has opted to pull out from its three western Baltic Basin concessions to cap its financial liability in relation to these operations.
The company exercised its option to withdraw under an agreement with ConocoPhillips Ltd to cease participation in the concessions once its share of the expenditure reached a limited of USD19 million.
3Legs chose to bow out as the results to date from the Lublewo LEP1-ST1H well have been at sub-commercial levels and the prospects of a more successful outcome "appear remote."
The well continues to flow natural gas and light oil in addition to frac fluid, and over the period of August 8 to Wednesday produced at an average rate of 396 million standard cubic feet per day and 157 barrels per day of light oil. 3Legs said that, based on information presently available to it, it does not feel confident that flow rates from the well are likely to improve to a commercially viable level.
3Legs' interest in the three concessions will be transferred to ConocoPhillips for no consideration.
The company estimates its cash resources at the end of September will be around GBP17 million; as it is not conducting operations elsewhere and has committed to shareholders not to pursue other activities outside of Poland, it is considering its options to maximise cash returns to shareholders.
3Legs is to release its interim results on September 30.
Shares in 3Legs were trading down 8.5% at 17.62 pence Wednesday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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