30th Sep 2014 17:07
LONDON (Alliance News) - New World Oil & Gas PLC, which is still trying to secure financing that it agreed under a deal in August last year, Tuesday reported a narrowed loss for the first half of the year as it cut administrative costs and after last year was hit by a write-off of dry well costs.
The oil and gas explorer said its pretax loss was USD1.9 million in the six months to June 30, compared with a USD9.5 million loss a year earlier when it had booked the USD6.9 million writedown.
It cut administration costs to USD1.0 million, from USD1.2 million as it eliminated a;; consultant contracts and its executive directors diverted 20% of their salaries to repay the loans used to participate in a placing in April 2013.
The company, which has an exploration block in Belize and a 25% working interest in two projects in Denmark, has USD2.9 million in cash and cash equivalents at the end of the half, down from USD3.5 million a year earlier.
It had agreed a subscription agreement with Niel Petroleum in August 2013, under which Niel would invest USD25 million into New World.
In its statement Tuesday, it said that while talks were continuing with Niel, it hasn't yet seen evidence of sufficient funds for the subscription to proceed. It said it keeps on getting assurances the deal will go ahead, and has already received USD4.8 million in escrow. Niel has also agreed that New World's on-going operating and overhead expenses can be off-set from the amount which might ultimately be repaid out of the escrow account.
"Your board and management is well aware of the frustration and disappointment felt by our shareholders over the past year. We continue to work in close partnership with Niel Petroleum to progress the subscription with a view to closing the deal and securing the finance. It has been a trying time for all of us but we remain convinced that completion of the NP subscription would be an important part of New World's future success," the company said.
New World Oil & Gas shares ended up 5.0% at 0.588 pence Tuesday. Its earnings report came after the market close.
By Steve McGrath; [email protected]; @stevemcgrath1
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