1st Aug 2014 09:59
LONDON (Alliance News) - Sefton Resources Inc Friday said it has made its first forbearance payment of USD120,000 along with interest payments to its bank, utilising loan funds provided by Hawker Energy LLC, a subsidiary of Sara Creek Gold Corp.
In July, Sefton set up a forbearance agreement with Hawker, in which Hawker would finance its ongoing field operations with the expansion of its previously announced loan to USD1.5 million, from USD1.0 million.
The deal followed an announcement in June when Sefton said that its bank agreed to an extension of final repayments until December 28, as long as Sefton made an immediate payment of USD360,000, monthly payments of USD100,000 plus interest at 8% beginning July 31 and payments of legal fees of USD20,000 per month during the forbearance period.
The oil and gas explorer, with operations in California and Kansas, said it continues to have discussions with Hawker over alternative financing to replace its bank commitments and complete a joint venture for the Tapia field in California.
The company also said that in California, 22 wells are in production, two wells are off-line for steam injection and soak cycles, while five wells are shut-in pending mechanical repairs and/or pump changes.
Sefton said total oil production for July is expected to be 2,200 barrels, an increase of 14% over the previous month.
The company has had a difficult year, swinging to a pretax loss in 2013 as increases in revenue were hit by significant impairment charges and higher general and administrative expenses following a case against bloggers Tom Winnifrith and Dan Levi.
The litigation, which was settled outside court, led to the departure of Sefton's former Chief Executive Jim Ellerton and an internal investigation during 2013.
Sefton Resources shares were up 7.1% to 0.182 pence, putting it amongst the top AIM All-Share risers on Friday.
By Tom McIvor; [email protected]; @TomMcIvor1
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