“The board has carefully considered the company’s options and has decided that priority should be given to keeping the company positioned to take advantage of any positive developments.”
The company, in a statement, said that if it loses the licences to expiry it will still hold other prospective leases including some in Wyoming, Utah and Nevada which are suspended. It added that suspension “may in time be lifted and allow operations to continue”.
“The board intends that the company remain positioned for as long as possible to take advantage of that situation should it arise,” it said.
“The board’s overriding strategy will be to position the company so it can take advantage of any positive developments and opportunities that may arise over the longer term.
“To that end, a contingency plan has been developed that includes curtailing the company’s operations by reducing equipment holdings, storage facilities and other overheads, including personnel costs. Core corporate activities, including audit, regulatory and legal functions will continue.”
Chief executive Brian McDonnell added: “While we still await permits to proceed with drilling on our West Play leases, the Company has been actively engaging with potential investors. As we have said, sufficient lead-in time remains to drill a well or wells before the relevant leases expire.
“If it should happen that funding cannot be raised in time to drill the wells for which permits have been sought, the company will continue to seek investment in order to explore its remaining leases.
“The board has carefully considered the company’s options and has decided that priority should be given to keeping the company positioned to take advantage of any positive developments.
“Changes in the funding situation, lease conditions or the wider regulatory environment could materially improve the company’s prospects. To that end, a contingency plan for reducing company activities and overheads has been drawn up and approved by the board and will be implemented at the appropriate time and as circumstances dictate.”
Read More: US Oil & Gas Plc details contingency plans