The Company’s portfolio of oil and gas interests are either minority stakes or non-operated assets and it is the Board’s intention to dispose of these interests in an orderly manner over time. The Board does not expect that any further significant funds will be committed to the oil and gas assets unless required, in the opinion of the Directors, to preserve their value, and therefore shareholder value, ahead of any realisation.
(a) Lansdowne Oil & Gas plc
The Company currently holds a 21.48 per cent interest in Lansdowne which is itself AIM listed.
Lansdowne holds extensive acreage including a 20 per cent interest in the recent Barryroe oil discovery in the Celtic Sea off the south coast of Ireland. Further details can be found on their website.
(b) Mesopotamia Petroleum Company (MPC)
The Company holds a 40.21 per cent stake in an associated company, MPC. In February 2009 MPC signed a JV agreement with IDC, the Iraqi state-owned drilling company, to create IOSCO. We announced on 8 July 2009 that IDC had ended the IOSCO JV as MPC had failed to meet a funding deadline. The MPC Board remains as committed as ever to building a presence in Iraq and since that date has been pursuing the re-instatement of the JV. The Board of MPC believe that the market opportunity for delivering shareholder value in Iraq, through the establishment of an oil service JV that is focused on drilling high productivity wells and increasing Iraq’s oil production, remains highly attractive.
The Board of MPC has reached agreement with all of its creditors for the deferral of their claims. The objective of this approach is to allow MPC to continue in business while it awaits an improvement in both the situation in Iraq and the financial markets generally. The MPC Board continues to believe that there will be tangible opportunities for MPC as those improvements occur and at that time MPC will seek to raise sufficient funding both to secure its future plans and repay the creditors claims.
MPC has meantime reduced its activities and its expenditure whilst continuing to monitor the situation and opportunities in Iraq. In order to fund ongoing near term activities, a number of existing MPC shareholders have agreed to inject £50,000 through the issue of new shares in MPC. As a result of this share issue SeaEnergy’s holding in MPC increased to 40.21%.
(c) Eagle HC Limited
Eagle is owned 100 per cent by The Company and has royalty interests in a number of North Sea blocks. Whilst none of the blocks are currently producing, two have had hydrocarbon discoveries drilled on them.
(d) Other Oil & Gas interests
The Company holds a small royalty interest onshore Bulgaria, over acreage shortly due to commence production. It is expected that as the Bulgarian acreage moves into production and the royalty starts to generate cash flow that there will be buyers for the royalty. Until recently, the Company held an interest in acreage offshore Montenegro, which is currently the subject of a dispute with the Montenegrin authorities. The Company considered it unlikely that a buyer would be found for these interests unless and until the dispute is successfully resolved, and has farmed out these interests to the former Executive Chairman, and retains a carried interest in any realisations which might be made.