Ignis Petroleum (CE) (USOTC:IGPG)
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From Jun 2019 to Jun 2024
Ignis Petroleum Group, Inc. (OTCBB:IGPG) today provides an update
for its shareholders on the Company.
Several changes have been implemented over the last twelve to eighteen
months, most notably the management structure. After the departure of
Mr. Piazza, day to day management of the Company has been taken over by
Mr. Geoff Evett, who now acts as CEO and Chairman of the Board.
The four areas Mr. Evett has been concentrating his efforts on have been
the restructuring of Ignis’s capital
structure, especially in view of the convertibles outstanding with the
Company’s senior creditor, rationalizing the
cost structure of the organization, assessment of the current project
portfolio and, finally, the identification of new projects.
Cost rationalization
Management has been downsized and many other costs the previous
Management carried have been cut. As a result, Ignis is now generating a
positive cash flow, enabling the organization to put in place its
restructuring program.
Projects
The ACOM A6 well has been productive and has generated a positive cash
flow for the company. The well is currently under a workover and
production is anticipated to restart as soon as this is completed. Upon
recommencement of production, the Company will assess the feasibility of
adding production capacity, both in terms of investment required and in
terms of logistics capacity. The latter is of importance as the capacity
to transport oil out of the area seems to be near full capacity at
present.
The project with W. B. Osborn Oil & Gas Operations ("WBO") to develop
the field located in Montague and Cooke Counties, Texas, continues to
progress and add to production. The project has recently reached
breakeven and Silverpoint Capital, the capital provider for the project,
has only now started to recoup its investment. The way the deal is
structured is that Ignis will start earning its working interest once
Silverpoint has recovered its original investment plus a certain return.
Even though no revenues are accruing to Ignis from this project as yet,
the fact that it has reached breakeven and has started to generate a
positive cash flow has created definite value to the Company.
At present there are no exploration or exploitation activities at the
Sherburne project as Management has decided that certain technicalities
make the economic viability of the project too risky a prospect to
pursue at present. The rights, however, have been retained.
The Barnett Shale wells (unrelated to the WBO project) to date have
proven unproductive and Management has decided to, for the time being,
not engage in risky investments on this project.
Capital Structure
As announced recently, Ignis and the Company’s
senior creditor have executed a new agreement under which the conversion
price of the debentures held has been fixed at $0.03. This is the first
step in the recapitalization process for the company and one management
deems imperative to start building shareholder value. Without the
agreement, the overhang of the convertibles would be of an uncertain
magnitude, effectively rendering further investment in the Company a
very tough prospect. With the agreement executed, the overhang is now
quantifiable and allows for management to pursue further opportunities.
As announced, the dialogue with the creditor is positive and
constructive and Management expects further announcements to be made
regarding the capital restructuring.
New Projects
The Board of Directors has deemed the Liberty Hills project, which the
Company was pursuing, as not suitable for the Ignis portfolio. As a
result, the Company is now in a position to actively pursue new
opportunities. Ignis is in discussions on a number of fronts. With its
new management structure and contacts within industry, the Company has
the ability to engage the services of certain very highly regarded
energy professionals to judge the merits of new projects. With the
financial and business acumen of the Board, the Company is positive on
the prospect of securing new and profitable projects that will create
significant shareholder value.
New projects will have to comply with strict criteria. There will be no
wildcatting and projects with a high exploration risk will not be
considered. Management prefers projects where proven reserves can be
extended through targeted exploration or where new technologies can add
significantly to the already established production flow. Furthermore,
Management will assess the projects it currently holds a working
interest in for production expansion.
Geoff Evett, Chairman of the Board and CEO, stated, “We
have done a lot of work these last twelve to eighteen months in
restructuring the organization and have put Ignis on a new footing,
enabling us to actively pursue new opportunities. We now have the
capital structure, management, industry connections and links to
financial partners that will enable us to do so. Furthermore, we are
cash flow positive, which allows us time to analyze properly new
prospects. We are confident we have been and are doing what is needed to
put value into Ignis, and I look forward to informing our shareholders
on a more regular basis.”
About Ignis Petroleum
Ignis Petroleum Group, Inc. is a Dallas-based oil and gas production
company focused on exploration, acquisition and development of crude oil
and natural gas reserve in the United States. The Company's management
has closely aligned itself with strategic industry partnerships and is
building a diversified energy portfolio. It focuses on prospects that
result from new lease opportunities, new technology and new information.
For further information, visit www.ignispetro.com.
Safe Harbor for Forward-Looking Statements
This release contains certain "forward-looking statements" as defined by
the Private Securities Litigation Reform Act of 1995, including, without
limitation, expectations, beliefs, plans and objectives regarding the
potential transactions and ventures discussed in this release. Among the
important factors that could cause actual results to differ materially
from those indicated by such forward-looking statements are the risks
inherent in oil and gas exploration, the need to obtain additional
financing, the availability of needed personnel and equipment for the
future exploration and development, fluctuations in gas prices, and
general economic conditions.