* Says may not be able to meet current liabilities
* Cash balance at the end of second quarter slumps
* Second-quarter loss widens, sales volume falls
* Plans to shed non-core assets in India, Trinidad
* Shares fall to life low (Adds details, analyst comments; updates share movement)
By Garima Goel
Nov 15 (Reuters) - Canadian oil and gas producer NikoResources Ltd said it might not be able to meet itsliabilities and raised "significant" doubt about its ability tocontinue as a going concern, sending its shares plummeting asmuch as 57 percent.
The company said it had a working capital deficiency of $110million as of Sept. 30. Its cash and cash equivalents haddropped to $55 million in the period from $98.1 million a yearearlier.
Niko, which is trying to restructure debt and refinanceloans to fund drilling in India, has been plagued by fallingproduction at the D6 block off the east coast of India.
Niko shares fell to a life-low of C$1.12 in early trading onthe Toronto Stock Exchange on Friday after the company postedits 10th straight quarterly loss. The stock has lost nearlytwo-thirds of its value this year.
The company said it had not been able to raise funds fromusual sources despite "aggressive" efforts and was now lookingat "high cost finance package with tight repayment terms."
Niko said it had secured about $340 million of debtfinancing, which is dependent on the company settling somerig-related payments with Diamond Offshore Drilling Inc for drilling off Indonesia.
"They have secured some very high costs debt. It raisesquestions about whether there is going to be anything left forthe equity holders," said Macquarie Research analyst DavidPopowich.
Niko had $734.5 million in total liabilities, includingissued debt, loans and other obligations at the end of Sept. 30,up from $618 million a year earlier.
The company's quick ratio, an indicator of its ability tomeet short-term payments and debt liabilities, stands at 0.54 -its lowest in a year. The ratio has remained under 1 since theend of 2011.
A ratio under 1 suggests that the company might be unable topay off its debts if they became due immediately.
D6 OUTPUT
Sales volumes from the D6 block, in which Niko has a 10percent working interest, almost halved to 54 million cubic feetof gas equivalent per day in the second quarter ended Sept. 30.
The block accounted for almost half of the company's totalsales volumes in the quarter, down from nearly 61 percent a yearearlier.
India's Reliance Industries Ltd operates the D6block, in which it holds a 60 percent interest. BP Plc holds the remaining interest.
Uncertainty over the Indian government's decision to doubledomestic gas prices from April 1, 2014 is also weighing on Niko.
The company is selling assets and had temporarily suspendeddrilling in Indonesia to focus on its India operations.
Niko agreed in August to sell a 40 percent stake in anoffshore exploration block in Madagascar to Austrian oil and gasgroup OMV and interests in some Indonesian assets for$40 million.
Niko said on Friday it would sell some non-core assets inIndia and Trinidad.
Calgary, Alberta-based Niko also operates in Pakistan,Bangladesh and the Kurdistan region of Iraq.
The company's net loss widened to $149 million in the secondquarter from $28.6 million a year earlier.
Niko shares were down 50 percent at C$1.30 on the TorontoStock Exchange. (Editing by Kirti Pandey and Sayantani Ghosh)
BP (BP.)
