23rd Sep 2014 13:36
LONDON (Alliance News) - Madagascar Oil Ltd Tuesday said it is considering numerous options to secure funding for the next stage of its development, and is also in advanced talks with some of its existing shareholders about an equity fundraising that's likely to be structured as a placing and open offer.
The oil explorer, which also revealed that its loss widened in the first half of the year as it was hit by the depreciation of the Madagascan Ariary against the US dollar, said it expects to announce details about the fund raising discussions in the near future.
It reported a pretax loss of USD5.9 million for the six months ended June 30, wider than the USD4.9 million loss of a year earlier, due to the currency hit. The company generates no revenue, and its costs were broadly flat.
Madagascar said its cash in hand at June 30 was USD10.1 million, plus further restricted cash balances of USD1.1 million. The cash in hand has decreased in the last six months due to spending on the acquisition of exploration and evaluation assets amounting to USD10 million, and USD3.5 million of operational expenses.
"We are working with some of our major shareholders to secure new equity funding, which is likely to be structured as a placing with a subsequent open offer, in the near future to allow us to move forward with the next phase in the development of our company. We also continue to consider other strategic funding options for the longer term," said Senior Independent Director Iain Patrick.
Operationally, Madagascar Oil made good progress, with the steam flood pilot showing encouraging results, with cumulative oil production at 124 thousand barrels of oil equivalent, a 32% increase from May to August, of which half, was held in the Tsimiroro storage tanks.
As of August 31, 62,703 barrels of crude oil were held, and a new crude oil blending and truck loading facility has been built at the steam flood pilot to allow the crude oil to be blended with diesel to meet the specifications for heavy fuel oil in Madagascar.
Madagascar Oil said it should release its Tsimiroro development plan before the required deadline of November 4.
Madagascar Oil's shares were down 2.2% to 11.00 pence per share Tuesday afternoon.
By Joshua Warner; [email protected]; @JoshAlliance
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