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Quarterly Activities Report

Quarterly Activities Report

For the period ended 30 June 2017

SUMMARY:

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The reporting period has been a very busy quarter for Metgasco

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Environmental Authorities granted for ATP 2020 and for ATP 2021

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Full drawdown by Byron Energy Ltd (ASX:BYE) (Byron Energy) of the Metgasco Funding Facility and A$8.0m Convertible Note issued to Metgasco in January 2017.

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Tender submitted for attractive acreage in Australia

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Board continued to evaluate opportunities in the Oil & Gas sector that it considers provide robust potential returns for Metgasco shareholders

The highlights of the quarter’s activities are outlined below.

Queensland exploration blocks

Environmental Authorities were granted for ATP 2020 and ATP 2021 by the Queensland Department of Environment and Heritage Protection. Metgasco is progressing through the Native Title notification process and Authorities to Prospect will be granted after Native Title agreements are finalised. Metgasco continues to advance its technical knowledge of these two blocks, which it considers to be highly prospective.

New business

During the quarter, Metgasco has prepared and submitted a formal tender for a very attractive opportunity offered by an Australian State Government. The evaluation process is underway and the tender conditions prevent the company from disclosing any further details at this stage.

Metgasco continued with its strategy of reviewing a number of opportunities in the Oil & Gas sector and each opportunity has been reviewed for its potential to deliver short term reliable returns, long term growth opportunities and an appropriate risk / reward balance. The Board remains confident of closing a favourable transaction although the timing of this is unable to be provided definitively as commercial-in-confidence negotiations continue.

The Board has during the quarter focused intensely on a very attractive opportunity which unfortunately could not be brought to a close.

Cash position

The Company ended the quarter with a cash balance of $10.2 million and with no debt.

The Byron Energy funding facility is fully drawn to A$8.0m with quarterly repayments of $1m to commence in October 2017.

The following is a reconciliation of the Company’s cash position from 31 March 2017 to 30 June 2017:

 

$A’000

 

Cash at 31 March 2017

10,247

 

Net interest and investment income

359

 

 

Exploration and evaluation expenditure

-

 

Property Plant and Equipment

(3)

 

Overhead and administrative

(406)

 

Cash at 30 June 2017

10,197

 

The Company’s cash backing as at 30 June 2017 was $0.0256 per share. This compares with the equivalent cash backing reported as at 31 March 2017 of $0.0257 per share. Shareholders should note that Metgasco’s Funding Facility to Byron Energy with a face value of A$8m is accounted for as a receivable and is excluded from the above calculation. Metgasco Cash and Receivables therefore total $18,197,000.

Cost and capital management.

The Company continues to pay particular attention to costs and capital management whilst retaining its ability to seek new business opportunities. No new executive staff have been retained. Metgasco has utilised contractors for various activities including project evaluation over the quarter and these are expensed as Overhead and Administrative items for the purposes of the above cash reconciliation.

The Company’s cash balances are held as cash at bank and term deposits.

Shareholder base

At 30 June 2017, Metgasco had 398,464,823 shares on issue and 2,673 shareholders. Its top 20 holders held 194,180,739 shares or 48.73% of the Company’s issued capital.

Certified Reserves / Resources

The company has no certified reserves or resources at present.
Tenements / Farm-in Opportunities

As notified to the ASX in July 2016, the Company elected to exercise its option to farm-in to Byron Energy’s Bivouac Peak Littoral Louisiana oil & gas project. In September 2016, the Company announced that it had executed the Bivouac Peak Participation Agreement, which formalised the Company’s position in the project. As at 30 June 2017, the Company holds a 10% working interest (7.45% Net Revenue Interest) in the Bivouac Peak project which is expected to cost approx. US$1.3m (A$1.8m on current exchange rates). Metgasco has been advised by the Operator, Byron Energy, that approval processes are ongoing. Drilling is planned to commence no earlier than Q4 of 2017.

Outlook - work program for next quarter

The prime focus for the Company in the next quarter is to successfully conclude its New Business priorities as discussed above.

ENDS

For more information contact: 

Alexander Lang, Executive Chairman

Phone: +61 02 9923 9100

CONTACT US

North Sydney Office
Level 3, 2 Elizabeth Plaza
North Sydney NSW 2060

Tel: +61 2 9923 9100
Fax: +61 2 9959 5387

Metgasco Limited  ACN 088 196 383