Cluff confident in portfolio amid market volatility

(Sharecast News) - Natural resources investment company Cluff Natural Resources responded to its recent share price volatility on Friday, telling shareholders that, irrespective of market uncertainty related to commodity price weakness and the Covid-19 coronavirus pandemic, its operations and planned work programmes remained on track, with day-to-day operations said to be unaffected.
The AIM-traded firm said it was in a position of "relative strength", adding that it had no direct exposure to oil prices, no debt and was well capitalised following a fundraising in June.

As at 29 February, it had ?13.3m, with the board saying Cluff remained funded for its share of the Selene and Pensacola wells and, on current plans, for its working capital requirements through to the end of 2021.

The company was continuing to focus on its portfolio of natural gas exploration assets in the UK, and was continuing to work closely with its joint venture partner Shell UK towards a number of key potential value catalysts during this year.

Those included well investment decisions on the Selene and Pensacola natural gas prospects in the Southern North Sea.

Cluff said that, while the Dewar farm-out process remained active, it was expecting that the current commodity market volatility could impact on the deliverability of the farm-out within the timelines it had earlier communicated.

The company said it would review the status of the farm-out process once the impacts of the Covid-19 outbreak were better understood, and some "relative stability" had returned to commodity prices and the wider market.

UK Oil and Gas Authority guidance regarding the award of 32nd UK Offshore Licensing Round remained unchanged, the board added, with the Company still expecting licence awards to be made in the second quarter of the year.

Success in the round would further "expand, enhance and diversify" the company's existing portfolio of prospects, the directors said.

"Cluff remains in a strong position from which to deliver exceptional growth," said chief executive officer Graham Swindells.

"We remain fully financed for drilling activity and have multiple upcoming catalysts for growth from our existing and potentially expanding portfolio via the UK Offshore Licensing Round."

Swindells said "good progress" was being made on the Pensacola and Selene licences with Shell, as the firms continued to work towards well investment decisions on both licences.

"We look forward to updating shareholders on Selene, Pensacola, the farm out process of our Dewar prospect and new licence awards, in due course."