Stratic Energy sounded a warning yesterday on its ability to continue to operate as a going concern.
The Canadian oil and gas company, whose principal operating office is in London, said it had achieved net income of £7.94million for the third quarter of 2009 compared with net losses of £7.88million a year earlier.
Income for the latest period included a gain on the sale of its Breagh assets in the UK of £13.64million. Gross proceeds of £34.4million were received from the Breagh sale and were used mainly to pay down bank and other debt, Stratic said.
It also said the sale of its Italian business to Enel for £30.85million in cash was expected to complete late in the first quarter of 2010, and there would be a further contingent consideration of up to £5.94million depending on the timing of a start to Longanesi field production.
Stratic chief executive Kevin Watts said: “With the sale of our Italian business we will have met or exceeded all of the restructuring targets we set for the company exactly 12 months ago.
“Once the sale completes we will have raised more than £69.7million from asset disposals, and we will have significantly improved our balance sheet and financial flexibility.”
The company said, however, it did not have sufficient liquidity to meet its expenditure obligations and scheduled debt repayments due at the end of this year, and its ability to continue to operate as a going concern depended on the availability of new equity, the timing of anticipated cash flows including from disposals, and the continuing support of its bankers.
Stratic’s principal interests are in the UK and Dutch sectors of the North Sea, Italy and the Mediterranean area, including Turkey and Syria.