---Adds broker comment and background---
() shares advanced almost 20% this morning as it confirmed a US$1.625 million to sell its assets in the US Gulf of Mexico.?
The company says the sale will be completed this week. The cash will help reduce Leni?s needs to source additional capital from either the equity or debt markets.
It will also allow the company to ?actively accelerate? its work on the Goudron field, in Trinidad, which hosts 7.2 million barrels of proved and probable (2P) oil reserves ? and 30.5 million 3P reserves.
Leni considered the Gulf of Mexico assets, which generated ?383,000 of revenue and ?204,000 gross profit last year, as being non-core for the company.
"Our investment in the offshore Gulf of Mexico has become a distraction to LGO's main strategic drive to invest in onshore production enhancement projects in Trinidad, where LGO holds both high equity positions and field operatorship,? said chief executive Neil Ritson.
?These funds will be used to fast track the Goudron redevelopment, for which a second work-over rig will be mobilised to the field shortly."
Barney Gray, analyst at City boutique Old Park Lane, said the deal was great news because it allows Leni to advance the development of Goudron.
?LGO continues to hone its strategic focus on Trinidad,? Gray said in a note to clients.
?The group recently acquired field operatorship of Goudron and the additional funds realised from the sale of the GOM assets will enable LGO to mobilise a second drilling rig at Goudron.?
The broker rates the stock as a ?buy? with a 3.1p target price.
On AIM this morning Leni shares were up 0.2p, or 18%, trading at 1.3p each. It has been a hot stock recently - more than doubling in value rising from 55p in the past week.
Analysts believe the Goudron project has the potential to propel Leni into a ?different league?.
The expectation is that through ongoing work-over and development work Leni can enhance output and importantly covert the ?possible? barrels in the 30.5 million barrel 3P reserve into the higher confidence 2P reserves.
Beyond that, it is thought the field?s potential for enhanced recovery, through techniques such as water-flooding, could unlock even more upside in the longer term.
Leni began a work-over programme at Goudron last month. Initially five wells are being refurbished and collectively it is hoped this will add 50 barrels of additional output per day, taking the field?s ?stable rate? production over 100 barrels a day.
If successful the programme could provide the blue-print for a more substantial campaign ? as there are a total of 92 available wells on the Goudron field.
dennys glen davis a christmas story prime rib ny knicks prime rib recipe norad santa tracker
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.