22nd Feb 2016 09:15
LONDON (Alliance News) - Edge Resources Inc on Monday said it has reached a settlement on a disputed invoice with an unnamed third party totalling USD536,000 in value and said it is continuing to seek further financing to shore up its operations.
Edge said it paid no cash to settle the dispute and removed further invoices from its accounts payable under the settlement. It has settled the claim with the assignment of five loss-making natural gas wells and abandonment liabilities to the third party.
The dispute related to production and volume allocation errors made in the Gilby operating area in Canada in 2012 and 2013.
"The strength of our negotiating position was reflected in the exceptionally positive outcome of this settlement. We turned what appears in our financial statements as a large, disputed invoice into a reduction in liabilities and improved cash flow, with an insignificant impact on production and reserves for virtually no cost. This seems like a clear victory for Edge shareholders and allows the management team to finally move on from this nuisance," said Brad Nichol, Edge's president and chief executive.
Edge also said it no longer expects further funding from an investor group with which it entered into talks in July last year. It is continuing to seek further sources of capital but said the current environment for oil and gas companies is very challenging. Edge said its continued operating remains dependent on the support of its bankers.
Shares in Edge were flat at 1.25 pence on Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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