LONDON (Alliance News) - Gulfsands Petroleum PLC shares plunged on Wednesday as the firm said it plans to become a private company, and has secured funding through to 2020 to pursue a new medium-term strategy.
Shares were down 72% on Wednesday at 1.27 pence each.
Gulfsands - which has assets in Syria, Morocco, and Colombia - has finalised a GBP4.0 million extension to an existing GBP4.0 million financing facility from major shareholders ME Investments Ltd, Waterford Finance & Investment Ltd, and Blake Holdings Ltd.
This cash will fund a new strategy of acquiring further oil and gas assets in the Middle East as well as seeking to be able to return to its assets in Syria.
In light of the new strategy, Gulfsands said it has decided to de-list from London's AIM, and it hopes to complete this on April 23.
Regarding Syria, where it holds a 50% interest in Block 26, Gulfsands said it remains unable to involve itself in operations due to EU sanctions, though the site is believed to be undamaged. Oil production returned in early 2017, and Gulfsands said production was around 15,000 to 20,000 barrels of oil a day, but it cannot verify this.
Gulfsands holds 100% of the Putumayo-14 and Llanos-50 licences in Colombia. It expects to complete a consultation process with local communities on Putumayo-14 in August, and it has re-started a search for a licence partner.
However, on Llanos-50, environmental issues have held up work, and the resolution of the issue could involve Gulfsands giving up the block. Further, it faces the possibility of financial penalties from authorities in Colombia due to unfulfilled work obligations, as previously disclosed.
In Morocco, a country Gulfsands is exiting, it "firmly" believes it is owed USD6.0 million by the country's mining ministry as reimbursement for wrongly resized funds relating to expired permits. The company is seeking legal advice to resolve this.
