20 Mar 2015 15:57
20 March 2015
Max Petroleum Plc
("Max Petroleum" or the "Company")
Update re financial and operational position
Max Petroleum announces that, following the suspension of trading in its ordinary shares on the AIM market of London Stock Exchange plc on 2 March 2015, it has continued to discuss an appropriate debt restructuring with Sberbank and an equity investment from AGR Energy. In addition to a debt restructuring and equity investment, the Company also requires bridge financing of at least US$6.5 million to ensure the Company is viable for the period until the regulatory and other approvals can be in place to permit the debt restructuring and equity investment, if agreed.
The Company has been notified that its operational bank accounts in Kazakhstan will be suspended as a result of non-payment of sums owed to the Kazakh tax authorities. In addition, export sales have been halted due to uncertainty over the Company's ability to guarantee future payment for transport and other costs necessary to ensure delivery of such sales.
As a result of the demobilisation of the Company's last workover rig, due to non-payment of invoices, production has so far been impacted by the failure of one producing well at Zhana Makat, representing a loss of approximately 170 barrels of oil per day (bopd), which the Company will be unable to get back into production until it procures a replacement workover rig.
Sagiz West production has been shut-in until regulatory permission is granted for it to proceed to Trial Production Phase, expected if an extension is granted to the Blocks A&E Licence later in 2015. Total current production from producing wells at Zhana Makat, Borkyldakty and Asanketken is approximately 3,100 bopd, which is being delivered on a non-cash basis as settlement towards the Company's domestic crude oil sales prepayment liability.
The Directors of Max Petroleum currently continue to believe that there remains a reasonable prospect that ongoing discussions could result in a sufficient refinancing of the Company, including bridge finance, being agreed with Sberbank and AGR Energy in the very near future and, on that basis, have not yet put the Company into administration.
A further announcement will be made in due course.
ENQUIRIES:
Max Petroleum Plc | +44 (0) 20 3713 4015 |
Tom Randell | |
Stifel Nicolaus Europe Limited | |
Michael Shaw | +44 (0) 20 7710 7600 |
Tom Yeadon |
Save where the context requires otherwise, capitalised and technical terms used in this announcement shall have the same meaning as ascribed to them in the Company's circular to shareholders dated 12 November 2014.