Beacon to become cash shell28 Nov 2024 09:55
AIM-listed Beacon Energy, the full-cycle oil and gas company with a portfolio of onshore German assets through its wholly-owned subsidiary, Rhein Petroleum, has provided the following corporate update.
Reservoir performance from the SCHB-2 well continues to disappoint with current production of approximately 45 bopd, a decline of approximately 20% since the installation of a rod pump in early September 2024 Notwithstanding the material cost reduction initiatives previously disclosed, production at these levels places doubt on the future financial viability of Rhein Petroleum, absent material capital investment As previously disclosed, Beacon Energy had put forward a fully financed restructuring plan to the Rhein Petroleum creditors aimed at maximising cash generation from the Rhein Petroleum business and delivering value for creditors
Given the production declines seen at the SCHB-2 well, Beacon Energy has been unable to put forward a restructuring offer which is agreeable to the Rhein Petroleum creditors
The Company has now been informed by Rhein Petroleum's creditor representative that it has agreed to sell certain assets of Rhein Petroleum to a third party (with completion expected in early January 2025), following which Rhein Petroleum would be expected to be liquidated (the 'Proposed Liquidation')
As previously disclosed, Beacon Energy has not provided any parent company guarantees related to the debts of Rhein Petroleum (approximately €7.5 million)
As a consequence of the Proposed Liquidation of Rhein Petroleum, Beacon Energy is expected to become an AIM Rule 15 cash shell in early January 2025 As a result of material cost reduction initiatives previously announced and assuming the Proposed Liquidation proceeds as expected, the Board believes it has sufficient liquidity to progress new business development through to end Q2 2025 The Company's strategy continues to be the creation a self-funding oil & gas production company taking advantage of growth opportunities resulting from industry players as they reshape their portfolios .......................................
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