Azonto Petroleum Ltd Quarterly Activity Report March 2015 (7690L)

TIDMAZO

RNS Number : 7690L

Azonto Petroleum Ltd

30 April 2015

 
 
 Azonto Petroleum Ltd 
  Suite 5, 531 Hay Street 
  Subiaco, WA, 6008 
  Australia 
  Portland House, 8(th) 
  Floor 
  Bressenden Place 
  London SW1E 5BH 
  United Kingdom 
  Grégory Stoupnitzky 
  Jay Smulders 
  T: [phone] 
  8500 
--------------------------- 
 RFC Ambrian Limited 
  Nomad and Joint Broker 
  Samantha Harrison 
  T: [phone] 
  6800 
--------------------------- 
 GMP Securities Europe 
  LLP 
  Joint Broker 
  Rob Collins 
  Emily Morris 
  T: [phone] 
  2816 
--------------------------- 
 Buchanan 
  Financial PR London 
  Ben Romney 
  Gordon Poole 
  T: [phone] 
  5000 
  E: [e-mail] 
--------------------------- 
 

March 2015

Azonto Quarterly Activities Report

Recent Highlights

 
      1. Steering Committee established between CI-Energies, 
       IPP contractor and VIOCO 
       2. Received bid for the Gazelle Facilities Engineering, 
       Procurement and construction contract 
       3. Maturation of block exploration prospects 
       4. Announcement of Strategic review including 
       potential sale of the Company's assets, merger, 
       or sale of the Company 
       Post period 
       5. Further cost-cutting measures resulting in 
       additional staff reductions 
-------------------------------------------------------------- 
 
 
 
 
 

A message from the Managing Director - Grégory Stoupnitzky

Following the organizational changes announced in January, the Board and the Management team have decided to further slim down the organization consistent with our announced plans to seek a strategic solution to the future of the Company. As a result, our personnel count is now reduced to 5 full time employees, and additional support from contractors as needs arise.

We continue to be in close discussions with CI-Energies, the Ivorian State-owned utility company, in relation to the planned independent power plant ("IPP") to be co-located in Grand Bassam, next to Vioco's onshore gas processing plant.

CI-Energies recently signed a non-binding MOU with a reputable international company which may finance, develop and operate the IPP at Grand Bassam and upgrade the power line infrastructure for the proposed Vioco integrated gas to power project. The intention is for the scope and schedule for the IPP to be agreed by the end of May 2015.

The ESIA environmental impact assessment report on the Grand Bassam project site has been completed and, following a period of public consultation, was submitted to the Côte d'Ivoire Environmental Agency (ANDE) on 20th March 2015 with a view to obtaining formal approval by the Ministry of Environment and Sustainable Energy by mid-May 2015.

In relation to the construction of the offshore and onshore elements of the Gazelle Project, a firm price proposal has been received from Rosetti Marino; however the price does not reflect the expected reduction of development costs. In order to achieve a realistic breakeven gas price, and to capitalize on current downward pressure on drilling and other construction costs, Azonto and its partners have therefore decided to re-tender the construction package. This will result in a delay in sanctioning the Gazelle project.

Azonto and its partner Vitol have also continued to mature the Hippo North prospect which is located 7km from Gazelle in shallow water of 70m. Hippo North is now ranking high in the CI-202 exploration portfolio to deliver potential additional gas resources to complement the Gazelle Field. In addition Azonto and its CI-202 partner Vitol recognise that there would be synergies in combining a Hippo exploration well with the Gazelle drilling campaign which would significantly reduce the cost of the exploration well. If successfully drilled and tested, Hippo North could extend the production profile on Gazelle by feeding through the existing facilities being planned for the project. A final decision on the drilling of Hippo North will need to be made by 7th October 2015, subject to budgetary approval.

The team has continued to invest time and effort to identify prospects in, and adjacent to, the Block which could form part of a regional gas play with substantial liquid upside, again revolving around core facilities about to be constructed in Grand Bassam.

Our goals are clear: lower G&A, renewed focus on our key asset, and accelerated efforts to secure a strategic solution that ensures more solid financial backing for the long-term development of the block and/or a sale of the asset. There is no guarantee any discussions will lead to a sale of its assets and/or a sale or a merger of the company

We are continuing to take and implement difficult but necessary measures to maximize our ability to find a strategic solution over the next few months and to leverage the existing possibilities on our Licence Area.

Grégory Stoupnitzky

Managing Director

Operations Summary

CI-202 - Côte d'Ivoire

Azonto holds a 35% ownership interest in Vioco Petroleum Ltd, which holds an 87% operating working interest in offshore Block CI-202. Vioco's working interest will be reduced to 71% if Petroci exercises its 16% back-in right, which will be decided Q2 2015. Vitol E&P Ltd holds the remaining 65% of Vioco.

Gazelle Field Development

The Engineering, Procurement and Construction bid for the Gazelle project has been received. In light of the current oil price environment, it has been decided to retender the project and benefit from the downward cost trend. A Steering committee has been established with Vioco, the gas buyer, CI-Energies, and the IPP contractor. Vioco is currently engaged with the IPP contractor to establish firm scope and schedule for an integrated project.

2015 exploration activity

Further work has been carried out to evaluate the Hippo North prospect, located 7km from Gazelle in shallow water of 70m, including the identification of an additional slightly deeper objective. The remaining prospectivity is currently being high graded, which has resulted in some exciting leads with significant upside potential.

CI-202

Offshore Côte d'Ivoire - Ivorian Basin

30km South East of CDI Capital - Abidjan

35% ownership interest in Vioco Petroleum Ltd, which holds an 87% operated working interest in offshore Block CI-202. Vioco's working interest can be reduced to 71% if Petroci exercises its 16% back-in right after development approval is granted.

Offshore Accra Contract Area - Ghana

In Ghana we have reluctantly decided to relinquish the Accra Block. Following the exit of the other partners in March 2014 Azonto's Ghanaian subsidiary, in which Vitol E&P Limited has a 43% interest, and the other remaining partner Afex Oil secured a six-month extension of the initial exploration period to September 2014 and conducted a farm-out process to try to find a suitable operating partner.

Despite significant industry interest, as a result of challenging market conditions a farm-out could not be concluded, and the partners elected not to seek a further extension to the initial exploration period, nor to apply to enter into the first extension period. We are currently finalising the closure of our Ghana operation.

Financial

Equity Issues

There were no equity issues in the quarter.

Capital Structure at 31 March 2015

 
                   Number 
-----------------  ------------- 
Shares             1,159,375,100 
-----------------  ------------- 
Unlisted options   35,310,150 
-----------------  ------------- 
 

Cash

Cash on hand at 31 March 2015 was A$5.1 million (unaudited).

Significant Shareholders

at 31 March 2015

 
                         Number          % 
-----------------------  ----------  ----- 
6466 Investment PTY 
 Ltd                     76,198,981  6.57% 
-----------------------  ----------  ----- 
Genesis Asset Managers 
 LLP                     70,138,995  6.05% 
-----------------------  ----------  ----- 
Mr Stephen John Dobson   64,247,719  5.54% 
-----------------------  ----------  ----- 
International Finance 
 Corporation (IFC)       63,707,267  5.49% 
-----------------------  ----------  ----- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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