27th Oct 2014 10:09
LONDON (Alliance News) - Max Petroleum PLC Monday said it is continuing to review its strategic options and look for a buyer, in an effort to get a superior proposal to the share subscription by AGR Energy that's currently also stalled awaiting shareholder approval.
The Kazakhstan-focused oil and gas company reiterated that if the shareholders don't approve the subscription, it may not be able to get funds from elsewhere.
Max Petroleum said on August 4 that it had raised GBP37.1 million through a cash subscription by AGR Energy Ltd No.1, which would give the vehicle owned by the Assaubayev family a 51% majority of the enlarged share capital of the company if current shareholders approve the deal. The shareholder meeting was expected to take place this month.
Max petroleum is highly geared, with USD82.8 million currently outstanding under a facility agreement it has with Russian bank Sberbank. In August it said it had breached some covenants related to production and reserves, although Sberbank agreed to reset the covenants. It is due to make a USD3.2 million principal payment to Sberbank in December 2014, a further USD6.8 million next March, and then quarterly principal repayments of USD6.6 million are required to be made through November 2017.
"In the event that the subscription does not complete and no additional funding is procured, the group's projected level of cash flow, after taking into account its debt servicing costs, will be insufficient to allow the group to recommence its capital programme," it reiterated Monday.
Max Petroleum said production in the six months to end-September averaged 4,239 barrels of oil a day, up 2% from 4,170 barrels in the six months to March 31 and up 17% on 3,630 barrels in the year-earlier period.
Since then, total production has averaged over 4,000 barrels of oil a day, comprising production from fields on continuous production of approximately 3,300 barrels and the rest from variable test production from its Sagiz West and East Kyzylzhar I fields. Test production is expected to be shut-in during the course of the remainder of the year, but the Sagiz West and East Kyzylzhar I fields are expected to start continuous production under a trial production project in mid-2015.
Max Petroleum shares were down 6.3% at 1.05 pence Monday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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