Petroleum Africa
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Thursday, August 27, 2015
PetroMaroc Corp.’s current financial position is hurting its exploration commitments in Morocco. The company entered into a Debenture Waiver and Amending Agreement with all three holders of the Cdn$9.7 million principal debentures in Q2 and closed a Cdn$0.4 million unsecured loan. The company is continuing its strategic and financial alternatives process and discussions are progressing with several interested parties, in conjunction with initiatives to secure short term additional capital for its ongoing costs. It also closed its Calgary office subsequent to the end of Q2, which resulted in cost reductions.
As for its financing affecting its exploration commitments, on the SidiMoktar onshore concession the company applied for a six to nine month extension of the first extension period, which currently expires on August 28. The extension is being sought so the company can secure additional funding to advance exploration on the license. The company is also seeking to release $0.5 million restricted cash lodged as a bank guarantee, per the company’s farm‐in agreement with MPE (a partner on the license). This extension, along with an agreed work program for the second extension period remains subject to approval by the JV partners and the Moroccan authorities.
On the FoumDraalicense offshore Morocco, the company and all the JV partners elected to withdraw from the license at the end of the First Extension Period, having fulfilled all work commitments.
Subsequent to the end of Q2 on the Zag license and following the JV partners not completing the minimum work commitment of the first extension period (which expired in May 2015), an extension of one‐year was agreed to by the JV. During the one‐year extension the company will continue to seek a mutually agreed technical, commercial and financial proposal to reduce its financial exposure insofar as possible. This extension remains subject to approval by the JV partners and the Moroccan authorities.
The company continues to accrue $1.2 million penalty costs due to a material uncertainty that the JV will either complete the minimum work commitment or reach an agreed technical, commercial and financial proposal on the Zag. The $1.2 million represents the company’s share of penalty costs per the exploration license first extension period, with the $0.6 million of restricted cash lodged as a bank guarantee being available to offset this potential penalty. Previously capitalized costs, which were impaired in 2014, continue to remain impaired.
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