LONDON (Alliance News) - Frontier Resources International PLC said Monday that it needs to arrange additional funding for its immediate working capital requirements and is considering all options, and in the meantime is taking measures to "substantially reduce" costs.
This includes directors agreeing to waive outstanding amounts owed to them under their existing service agreements, totalling GBP184,452, as well as waiving any future entitlement for remuneration under these agreements. The company also has agreed reduced settlement terms with creditors, together with the proposed issue of new shares as payment in lieu of services provided.
Frontier was granted an extension to the initial term of its 100% owned Block 38 in Oman, subject to the company providing a bank guarantee for the amount required to conduct an amended work-out programme. It is continuing a farm-out process for its interest in the block. However it noted that given the "challenging environment" for oil and gas programmes there can be no certainty to the outcome of this process.
"This is a very challenging environment for the oil and gas sector and exploration companies particularly. We continue to progress with the farm out for our Oman block and are actively working our advisers as we review the options for the company and its exploration projects. In addition we have aggressively reduced our working capital requirements to a minimum amount possible, and I would like to thank all of those who have worked with us for the financial sacrifices they have made," said Chief Executive Officer Jack Keyes in a statement.
Shares in Frontier Resources were down 35% at 0.147 pence Monday after the announcement.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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