Petrel might sell off assets to top up the kitty as ASX comes knocking
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Oil and gas play Petrel Energy is considering bringing in another partner — and possibly selling some of its assets to top up its coffers.
The company (ASX:PRL) has been quizzed by the ASX over its ability to keep the lights on. Petrel had $831,000 in cash at the end of the December quarter and flagged an expected spend of $3.2 million for the March quarter.
CFO Ian Kirkham told the ASX in his response that while Petrel is continuing talks over funding with its current partner on a project in Uruguay, it is also in talks with a number of potential new partners.
“With its increased 62.7 per cent holding in [operator Schuepbach Energy International] there is scope to introduce a new 20 per cent partner while Petrel retains more than 50 per cent of the project,” he said.
While it is too early in the process to say when Petrel would potentially introduce a new partner, managing director David Casey did tell Stockhead that the company is looking for a partner that will commit to funding the drilling of a minimum of one to two wells.
Petrel also flagged the possibility of selling off assets prior to it reaching production.
“Proceeds from the disposal or sell down of PRL tenements may well occur prior to the production phase but this will be considered cash from investing activities,” Petrel noted in its response.
However, Mr Casey did tell Stockhead that an “outright sale is unlikely” because there is “too much upside still on the table with both Spain and Uruguay”.
The company reassured the ASX that it will be able to continue operations, noting it is also considering a capital raising or loan on top of bringing in a new partner.
Petrel recovered first oil from the Cerro Padilla-1 well in Uruguay last quarter, but it was not considered economic.
The company said although it was not economic it represented a “quantum first step in redefining the oil, and potentially gas, prospectivity of the Notre Basin”.
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