19th Sep 2016 08:11
LONDON (Alliance News) - Argos Resources Ltd on Monday said it was very close to escaping the red in the first half of the year, a period when it was also close to drilling its flagship asset before delays hampered its plans.
The company's pretax loss in the first six months of the year amounted to USD4,000 compared to the USD755,000 loss a year earlier. Argos booked other income of USD308,000 from nil last year and and administrative costs fell to USD265,000 from USD750,000.
Argos holds a 5.0% overriding royalty interest on licence PL001 covering the North Falklands basin, which is operated by Noble Energy. In February, Noble cancelled the contract facilitating the rig to be used on the licence for "operational reasons".
That meant the planned well on the Rhea prospect was not drilled as planned.
Soon after, however, Argos signed a new deal with Noble and the other partners and in August, the licence was extended to November 2019, with a view of then obtaining a third, 10-year licence that would cover the third phase of operations.
"It was very disappointing to have been so close to drilling commencing on our licence, only to suffer the delay which ensued from the cancellation of the rig contract. However, a new participation agreement was completed promptly and in a very co-operative way between the parties ensuring that our overriding royalty Interest in the licence continues into the future and our ongoing running costs are covered, so we remain well positioned," said Chairman Ian Thomson.
"Both Noble and the company continue to be very positive about the exploration potential of the licence area," he added.
Argos shares were untraded on Monday morning, last trading at 4.75 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
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