LONDON (Alliance News) - Anglo African Oil & Gas PLC on Thursday said it requires further funding to cover the entirety of the costs of planned work on its wells in the Republic of the Congo.
Shares in the company were down 17% on Thursday at a price of 10.429 pence each.
Anglo African said further funding is necessary as it is unclear whether partners are either willing or able to fund their share of the costs on the TLP-103 well on the Tilapia project in the Congo.
The current cost of work on the well remains at USD7.0 million plus a USD1.0 million contingency, with USD1.0 million already incurred.
The company has cash reserves of over USD2.0 million, and also has a clause in the Tilapia licence allowing it to claw back drilling costs incurred over the pro rata share from future cash flows, it said.
Anglo African said it has received "several" offers with regard to funding, and TLP-103 will not spud until financing is in place.
The rig for TLP-103 is awaiting a pre-embarkation inspection, the company said, ahead of its move to the well. Anglo African has completed a range of works to prepare the site for drilling, and is currently undertaking location security work as well as nearing a completed environmental impact assessment.
Looking to other wells at Tilapia, Anglo African is allowing the flow rate at TLP-101 to slowly increase after re-opening the well last Friday. It is expecting to reach maximum flow in up to two weeks' time.
On TLP-102, Anglo African said testing has confirmed the well is in contact with the reservoir with pressure increasing steadily. It is to test whether oil can flow unassisted but it still expects flow to need mechanical assistance to reach its maximum rate, and has a pump on site for this purpose.
Anglo African also said Thursday it expects a new licence for Tilapia in the near future following an inspection by authorities.
It has also, it said, signed an exclusive right to enter talks to buy two producing fields in a new area, with due diligence being undertaken currently.
Executive Chairman David Sefton said: "I am pleased with the progress that the new management team continues to make and that the current work programme is on track with the work on both TLP-101 and TLP-102 being successful. The Company has now started to deliver on the operational promises made at admission.
"It is also very good to see work finally commence on TLP-103. The next round of funding will, critically, remove any uncertainty as to the drilling of TLP-103. This will allow the company to move forward and establish the value of Tilapia, which I know is the key milestone for all investors."
