$102.3 MM liquidity
AUD$85.8 MM in cash
AUD$16.5 undrawn from KeyBank facility
Ordinary share count = 575,423,498
unexercised employee options = 361,331
unvested performance rights = 10,819,395
convertible notes = 117,700,935 (conversion price will be reset in April 2014 according to a predetermined formula)
Credit Suisse (Hong Kong) has option to buy 50MM convertible notes until 10 May 2014
disappointing drop in Gulf Coast production
2Q2014 ave = 5157 boepd
2Q2014 EBITAX = $23.8 MM
1H2014 EBITAX = $41.2 MM
Not a favorable development for repaying/refinancing the USD$265MM Senior Secured Notes due 31-Oct-2017. These notes are secured by Gulf Coast and Wyoming oil and gas assets only.
From the release:
9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.
Average production for the quarter ended 31 December was 5,157 BOEPD, comprised of 92% oil which was lower than our forecast production exit rate. As a result of extensive evaluation of well performance in our Cedar Point field, we have opted to control flow rates in order to extend the life of the wells. Reservoir pressure has maintained across the wells drilled at Cedar Point but, for unforeseen reasons, we have been unable to maintain production at the rates anticipated across the fields. Various attempts at remediation were unsuccessful in significantly improving production. Consequently, we are now producing at controlled flow rates at Cedar Point to minimize water production and maximize ultimate oil recovery.
During the months of November and December we curtailed drilling activity across our Gulf Coast asset base in order to focus on enhancing our prospect portfolio through the interpretation of our newly reprocessed 3D seismic data.
Additionally, we were unable to continue our Cedar Point/Atkinson Island drilling program due to previously discussed water depth constraints during winter months. We expect to be able to maintain current production in the Cedar Point field whilst planning a second Galveston Bay drilling campaign in Cedar Point and Atkinson Island. Linc Energy plans to return to Galveston Bay in April 2014 to target up to ten additional prospects in the two fields combined. It is anticipated that the reservoirs at Atkinson Island will perform well and not experience the issues experienced at Cedar Point. Consequently, the initial production rates will be maintained for a longer period than we experienced at Cedar Point.
We have moved on location with a drilling rig at our Hoskins Mound field to drill one well. At the conclusion of this well we plan to commence a drilling program at our Barbers Hill field for the remainder of 2014. We continue to add to our robust prospect inventory of approximately 60 wells.
We are also likely to drill the first of our sub-salt prospects at Port Neches in the coming months.
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