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Cluff Natural Resources "Unlikely" To Receive Funds Owed From Placing

Thu, 7th Jan 2016 09:49

LONDON (Alliance News) - Cluff Natural Resources PLC on Thursday said it believes it is now "unlikely" to receive funds it is owed from a subscriber to a placing that had been due last September. However cost cutting at its Kincardine project in Scotland helped Cluff to end 2015 in a stronger cash position than it had expected.

Cluff said it has still not received the outstanding GBP331,125 it is owed by the subscriber and it is now considering its next course of action. It ended 2015 with a cash position of GBP1.1 million.

Cluff said it had opted to shift its focus from underground coal gasification in Scotland, particularly at Kincardine, following a moratorium on the practice in Scotland in October 2015. This moratorium was put in place despite "previous assurances the company had received from the Scottish government," Cluff said, and will remain in place pending a government study and public consultation.

This is expected to conclude in spring 2017. In the meantime, Cluff has stopped all of its expenditure related to Kincardine and has instead focused its attention outside of Scotland, particularly in the North East of England "where the company believes the political situation is more favourable with regards to UCG and considerable support exists for investment in energy and industry with a view to regeneration."

Six of the company's nine underground coal gasification licenses in the UK are in England and Wales, and as a result are not subject to the moratorium.

Elsewhere the company has made "significant positive progress" in advancing its North Sea assets, it said, working with Halliburton Co to develop them. In December it published a competent persons report and estimate of prospective resources that demonstrated the assets "significant gas potential".

"With no debt or major work commitments, Cluff Natural Resources is in a comparatively strong position to take advantage of opportunities which may arise given the challenging oil price environment. Our objective now is to complete the process of attracting the partners required to fully appraise the production potential of these exciting assets," said Chairman and Chief Executive Algy Cluff in a statement.

Shares in the company were down 12% at 2.88 pence Thursday morning.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

Copyright 2016 Alliance News Limited. All Rights Reserved.

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