International Oil and Gas Tech Ltd Trading Update (8888G)
March 09 2015 - 4:20AM
UK Regulatory
TIDMOGT
RNS Number : 8888G
International Oil and Gas Tech Ltd
09 March 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE
REPUBLIC OF IRELAND, JAPANOR ANY JURISDICTION IN WHICH THE SAME
WOULD BE UNLAWFUL.
9 March 2015
INTERNATIONAL OIL AND GAS TECHNOLOGY LIMITED
TRADING UPDATE
International Oil and Gas Technology Limited (the "Company")
today provides a trading update.
Company Updates
The Company has agreed an out-of-court settlement in respect of
the recovery of costs incurred between 2011 and 2014 in defending
the litigation against the Company which was dismissed by the Court
in May 2014. Under the settlement the Company is expected to
receive an additional GBP450,000 in full and final settlement of
the costs proceedings, supplementing the GBP500,000 interim payment
already made on account as disclosed in the Company's interim
results. Adjusting for this settlement, the Company's unaudited net
accrued liabilities (excluding investments) were approximately
US$2.3m as at 28 February 2015.
Given the ongoing processes for portfolio realisations and cost
recovery, the Company has entered into contractual arrangements
with its directors (the "Directors"), Linton Capital LLP ("Linton")
and certain of the Company's advisers. These formalise the deferral
of certain fees payable by the Company, grant security to the lead
creditor and establish parameters between the parties, which are
subject to certain milestones.
As previously announced, due to the Company's financial position
and the then-anticipated timing of the disposal of the Company's
investment in Strata Energy Services Inc ("Strata"), the Company
has served notice on its investment management and administration
agreement with Linton; this notice period will expire on 30 April
2015. The Directors have assumed responsibility for the Company's
operational activities, including full responsibility for the
day-to-day management, strategy and exit plan in respect of Strata.
Additionally two of the Directors have taken seats on the Strata
board in place of representatives of Linton. Linton continues to
manage and advise on the disposal of the Company's investment in
Crest Energy Services Inc ("Crest") and is finalising matters
following the disposal of the principal assets of SR2020 Inc
("SR2020").
The Company is required to publish its annual financial report
by no later than 30 April 2015.
Portfolio Updates
Strata
Strata has reported to the Company provisional, unaudited
revenues of C$31.75m and earnings from operations of C$4.90m during
its financial year ending 30 November 2014 (2013: C$24.29m and
C$1.95m). This positive trend was driven principally by reduced
down-time in Canada during the annual spring thaw and generally
full equipment utilisation in all operating areas until the end of
2014, at which time activity in Kurdistan began to be curtailed due
to political and security issues.
The very significant decline in oil price has so far had only a
modest negative impact on US and Canadian revenues as Strata
replaces customers forced to reduce capital budgets. In Kurdistan,
management is currently waiting out the political situation in
order to retain key pending contracts. Strata's consolidated
revenues and margins will be depressed as long as the Kurdistan
interruptions continue, which result in bank loans being out of
covenant with attendant increased cost of debt. Bank lenders appear
sympathetic, given the suspended operations and are showing
restraint, especially due to the process under way for IOGT to sell
its stake in the company to a buyer able to inject cash into the
business.
The Directors have determined it appropriate to pursue a
disposal of the Company's investment in Strata through a specialist
investment bank, whose terms of engagement involve payment by the
Company of a monthly retainer and a percentage of the gross
proceeds received from a sale. The formal marketing of the interest
has recently commenced; the first stage being contact with a broad
range of potential buyers. Despite Strata's operational issues
discussed above, the Board anticipates that buyer interest will be
robust due to Strata's position in the industry and the nature of
MPD/UBD technology as safety and efficiency drivers, which makes
Strata's services attractive in these times of lower E&P
margins.
CREST
Crest has suffered from delays in the scheduling of pipeline
work in Saudi Arabia which has been compounded by only having one
large nitrogen unit available to tender for work. The larger of its
two nitrogen units has been idle since August 2014, owing in part
to a lack of working capital to bid on operational contracts, and
as a result 2014 revenues will be materially lower than those in
2013. While Crest expects work using the larger unit to commence
within the coming weeks, these delays have caused cash flow
difficulties for Crest that the Company has had to meet with
contributions to working capital. Ultimately, and as previously
disclosed, an increase in the asset base is required to enable
Crest to become financially stable, and the Company continues to
look for an investor to take the business forward.
SR2020
As previously reported OptaSense Inc. of Houston, Texas has
acquired the seismic processing and imaging assets of SR2020, which
is now in the process of winding up any remaining assets and
distributing any residual proceeds in accordance with its debt
obligations.
For further information:
Investment Manager
Linton Capital LLP
David Sefton
dsefton@linton-capital.com Tel: +44 20 3384 8090
Corporate Broker
Numis Securities
Nathan Brown
n.brown@numis.com Tel: +44 20 7260 1426
Notes to editors:
International Oil and Gas Technology Limited is an authorised
closed-ended investment company incorporated in Guernsey. The
Company was admitted to the Official List of the UK Listing
Authority and to trading on the London Stock Exchange on 7 January
2008. Its stock market EPIC is OGT.L.
Further information can be found at
www.international-ogt.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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