LONDON (Alliance News) - MX Oil PLC expects to reach profitability after positive cash flow begins in 2020, it said Monday, while it has also received investment from Dubai.
MX said production from the Aje field offshore Nigeria has been stable since the start of February at 3,150 barrels of oil per day, meaning operators have successfully lifted oil from the field for the tenth time.
Only two further oil liftings and sales are required for Aje to repay its liabilities, MX said, and then start generating cash flow for investors. MX has a 5% interest in Aje.
Aje is producing ahead of expectations, MX added, and its 5% stake should bring positive cash flow from the first quarter of 2020, helping MX move to profitability.
MX Chief Executive Stefan Oliver said: "Aje has now completed ten cargo sales, the cash flow from which has enabled the partners to repay material amounts of debt held at partnership level."
"Assuming normal operating conditions, current production rates and oil price, we estimate two further liftings of similar size and value to our last, should result in project level debt being repaid or significantly reduced," Oliver added.
"Once this debt is repaid, assuming the factors above, our investment should generate free cash flow from each cargo sale which are estimated to cover all the company's operating overheads at current levels, allowing the company to move to profitability," he continued.
In a separate statement, MX said it has raised GBP680,000 in a 1.70 billion share subscription and placing to provide ongoing working funds.
Some 1.34 billion of these shares have been taken by Sheikh Ahmed Bin Dalmook Al Maktoum of Dubai, for GBP534,000, meaning he now holds a 30% stake in MX.
Oliver commented: "I'm delighted to welcome an extremely influential and knowledgeable strategic investor into MX Oil who I believe can bring significant value and provide access to opportunities and partners who we would not be able to access without them."
MX shares were 58% higher on Monday shortly before midday at 0.087 pence each.