TIDMMEN
RNS Number : 9772L
Molecular Energies PLC
09 January 2023
9 January 2023
Molecular Energies PLC
("MEN" or the "Company")
Operations and Strategic Update
Molecular Energies PLC (AIM: MEN), the international energy
company provides an operations and strategic update.
Hydrocarbon operations
Argentina
On 14 November, the Company issued a brief summary of the
auditor reviewed financial results for Q3 2022 ("the November
announcement"). The November announcement stated that the turnover
for the first 9 months for the year was in excess of US$ 26 million
with profit before tax, subject to and as strictly defined in the
November announcement, of US$ 16.9 million. The Argentine auditor
reviewed results for Q4 2022 are due to be released by mid-March
2023 and are expected to show continued operational profitability,
at which stage an operational review will be released for the full
year 2022.
In Rio Negro, a programme of well interventions is due to
commence shortly in the next two months to boost production. In
Salta, a like programme is getting underway as well as opening up a
number of old shut-in wells to identify any residual oil left where
possible artificial lift may sweep hydrocarbons to the surface due
to insufficient energy in the wells to produce oil to surface
naturally. In both areas, further sub-surface analysis is currently
ongoing with potential new drilling prospects highlighted which
will be matured in H1 2023.
The drilling of a high impact gas exploration well at the
Martinez del Tineo field in Salta is on the programme for H2 2023
which will also target proven oil reserves in that field. An
appropriate drilling rig has been identified and, to maximise
economies of scale with regard to future drilling in Salta,
advanced negotiations are in progress with regard to the drilling
rig being based at the Puesto Guardian Concession on a medium to
long-term basis from mid-2023.
Steps are being taken to further reduce opex in both operational
areas including the investigation of replacing diesel power
generation with own generated solar, a project which is intended
will be further developed this year subject to the results of a
promising preliminary feasibility study already undertaken being
confirmed.
Corporate bonds in Argentina
President Argentina has successfully converted the corporate
bonds, due to mature in 2023, to a new issue of bonds in the total
amount of US$ 10.8 million in aggregate at an interest rate of 4 %
per annum with a final maturity date now extending over 36 months
to December 2025. These bonds have been awarded investment grade
credit rating of A- by Fix SCR, the Argentine affiliate of the
international credit agency Fitch.
Paraguay
MEN has been informed that the designated drilling contractor
expects to complete the procurement of the drilling rig in Paraguay
in the middle of next week and the drilling contract is being
signed in anticipation subject to completion of formalities.
The necessary repairs and inspections referred to in the Company
announcement on 7 December 2022, are expected to commence next week
with the objective of the spudding of the well by the end of Q1
2023. The Company will advise the market as to progress at the end
of January 2023.
Louisiana
Both the Triche and Simmons wells are producing. Gross aggregate
December sales delivered to the refinery was 4,300 barrels of oil.
Production in January has started materially slower than in
December and is expected to continue at lower levels with further
natural declines due to the characteristics of the newly perforated
reservoir now becoming evident.
It is therefore inappropriate, whilst still profitable, that
such a small-scale production asset remains in the Group.
Contingent liabilities relating to the future plug and abandonment
of wells and facility will nevertheless have a cash-flow negative
effect in the fullness of time. Accordingly, this asset, together
with the contingent liabilities, is intended to be dispensed with
in Q1 2023 so that MEN can concentrate its resource and direction
in other areas.
Green House Capital, MEN's alternative energies division
("GHC")
GHC is pursuing an increasing number of opportunities in the
sphere of alternative energies.
Lithium
Further to the announcement made by MEN on 25 July 2022,
discussions remain ongoing with the Argentina State-owned company
for managing the energy and mining resources of the Salta Province.
At the same time, GHC is considering other areas in connection with
Lithium. Notwithstanding the ongoing work, this is expected to be a
relatively slow burner.
Dual Fuel
Reference is made to the announcement of MEN made on 5 January
2023 in this regard.
MEN regard this active opportunity as very prospective and
synergetic with that of Atome Energy PLC, in whom MEN has currently
a 25.2% shareholding.
Shareholders can expect further announcements in this regard
during H1 2023.
Other opportunities
MEN is currently pursuing a number of other opportunities under
GHC and expects to be able to advise the market positively in
regard to certain of these also during H1 2023. The objective is to
mix near term income generative business with those with excellent
prospects but on a longer lead time.
Strategic
The Company is taking decisive actions to reposition and
transition the Group whilst not neglecting its hydrocarbon
business. The forthcoming intended disposal of non-core Louisiana
assets is indicative of this and will be the first of other
housekeeping actions to be taken during the course of this
year.
In Q1 2023, MEN will be taking steps to meaningfully reduce and
right-size both the interest burden on the Company as well as
capital monies due under of the shareholder loan provided to MEN by
IYA, a company beneficially owned by MEN's largest shareholder and
Chairman, Peter Levine. IYA has indicated that it is both
sympathetic and supportive of the desirability to significantly
reduce the interest and debt at the parent company level in the
interests of the Company as a whole and its future expansion.
Discussions are underway between the Company and IYA with a view
to such reduction whilst retaining the benefit of an underpinned,
robust, and time extended line of credit from IYA in favour of the
Company supporting working capital for the repositioned group.
Whilst no guarantee as to the outcome can be given, the parties
are working towards finalising these discussions with a view to
implementing a strategy beneficial to the Company before the end of
Q1 2023 and expect to be able to inform shareholders of the plans
during that timeframe.
Contact:
Molecular Energies PLC +44 (0)20 7016 7950
Nikita Levine, Investor Relations info@molecularenergiesplc.com
finnCap (Nominated Advisor and broker) +44 (0)20 7220 0500
Christopher Raggett, George Dollemore
Tavistock (Financial PR & IR) +44 (0)20 7920 3150
Simon Hudson, Nick Elwes, Charles Baister
Notes to Editors
Molecular Energies PLC is an AIM listed company at the forefront
of energy development and has interests across the energy spectrum,
from oil and gas projects to subdivisions in the green and
alternative energy sub-sectors.
The Company has oil and gas production in two geographical
markets: Argentina and the United States, as well as exploration
assets in both Argentina and Paraguay. The Company also has two
separate subdivisions which are focused on early-stage
opportunities in the green and/or alternative energy
sub-sector.
Activities in the green and alternative energy space are being
carried out under the Green House Capital brand and through AIM
listed ATOME Energy PLC operating in Paraguay and Iceland,
producing green hydrogen and ammonia for use in fuels.
With a strong strategic and institutional base of support, an
in-country management team as well as the Chairman whose interests
as the largest shareholder are aligned to those of its
shareholders, Molecular gives UK investors access to an energy
growth story combined with world class standards of corporate
governance, environmental and social responsibility.
[The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK Domestic Law by virtue of the European Union (Withdrawal) Act
2018 ("UK MAR"). The person who arranged for the release of this
announcement on behalf of the Company was Peter Levine,
Chairman.]
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