LONDON (Alliance News) - Wildhorse Energy Ltd Tuesday made a U-turn on its planned development of its assets in Hungary as it plans to exit from all its operations in the country and focus on its Golden Eagle project in the US and pursuing new opportunities.
Wildhorse shares were down 7.3% to 0.255 pence per share Tuesday morning.
In June, Wildhorse announced it was discussing the Mecsek Hills uranium project with the Hungarian government with the aim of forming an agreement to develop the project with two joint venture partners, Mecsekérc and Hungarian Electricity Ltd.
The company has now decided not to proceed with the joint venture due to a lack of progress being made and because Wildhorse had suffered from high operational costs to date, it said in a statement. Wildhorse aims to divest of the project without incurring any further costs, it added.
Wildhorse has made no progress in its attempts to divest from the Mecsek Hills underground coal gasification project, also in Hungary. A number of unsuccessful attempts have been made, and the company has decided to cease all activities at the project.
The company signed a binding heads of agreement in February to sell the assets to Linc Energy Ltd for AUD4 million and said the deal was in the conclusion phase in July, but no developments have emerged since.
"Decisions have been made following a number of unsuccessful attempts to divest and/or joint venture the various projects, and taking into account the associated high costs to maintain and/or further explore these projects, particularly in light of the current difficult financial and commodity markets," said Wildhorse.
The value of the Hungarian projects had been progressively written down to having nil value by June 30, so the new decisions are not expected to have a material impact on the company's current financial position or results for the 2015 financial year, it said.
"The company will cease all operational and administration functions in Hungary over the coming weeks. This will eliminate all ongoing cash outflows associated with the Hungarian operations and allow the company to focus on its Golden Eagle Uranium project in the USA and also to pursue new opportunities," said Wildhorse in a statement.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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