Cabot Energy PLC – Q1 2019 Financial, Operational & Trading Update

Cabot Energy PLC – Q1 2019 Financial, Operational & Trading Update

Cabot Energy (AIM: CAB), the AIM quoted oil and gas company focussed on creating predictable production growth in Canada, provides an update on the Company’s financial position, operations and trading for the quarter ended 31 March 2019.

Group Production and Sales

  • Revenue for Q1 2019 of US$2.0 million (Q1 2018: US$3.4 million)
  • Average Q1 2019 gross production of 511 barrels of oil per day (“bopd”) (Q1 2018: 725 bopd)
  • Average Q1 2019 crude oil sales price of approximately US$44 per barrel (Q1 2018: US$51) and an average Edmonton Light Oil (“Edmonton”) price discount to the West Texas Intermediate (“WTI”) price of approximately 9%, reflecting the restoration of the historic price differential
  • At current crude oil sales prices, Canadian operations remain cash flow positive, including the continuing settlement of overdue Canadian trade creditors with whom the Group secured voluntary binding agreements in January 2019 

Financial Update

  • In March 2019, the Company successfully raised £2.53 million (US$3.35 million) in gross proceeds from a subscription and open offer which, together with the sustained improvement in the Edmonton price since February 2019, will provide sufficient working capital for the Group through to the end of May 2019
  • Unaudited Group cash on the balance sheet of US$0.3 million as at 13 May 2019 (31 December 2018: US$0.9 million)
  • Cabot Energy has engaged a specialist financial advisory firm to source Canada asset-level debt finance for the development drilling of the Company’s proven and probable reserves in Canada, commencing with a fully funded 2019 summer work programme
  • While management remain confident that the debt finance discussions will result in a successful outcome for the Group, no debt commitments have yet been secured
  • Supportive majority shareholder, High Power Petroleum (“H2P”), has indicated its willingness to provide limited short-term funding, pending the satisfactory progression of the ongoing debt finance discussions 

Scott Aitken, Chief Executive Officer, said: “The first quarter of 2019 has seen the Edmonton oil price rebound strongly towards its historic price differential with WTI. Crude sales prices were therefore significantly above our planning assumption and this, alongside tight cost control and anticipated short-term funding from H2P, has provided us with a longer period to negotiate the debt funding for the planned drilling and workover operations in the summer. We look forward to updating the market as soon as practicable, although no assurances can be given at this stage that the debt financing discussions will result in a successful outcome for the Group.”

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