Austral Pacific says reports misleading
Austral Pacific says reports misleading
Wellington,
New Zealand
- April 8, 2008 - Austral Pacific Energy Ltd. (TSX-V: APX; NZSX: APX; AMEX:
AEN)
Austral Pacific says reports that it is in financial difficulty are
misleading, and although the company has, as acknowledged in its financial
statements, short term liquidity issues, it is executing a plan to manage the
cash flow challenge and to unlock the significant value in its Cheal asset, which holds some US$72 million (NZ$91 million)
of proven and probable reserves[1].
Commenting on recent media reports, Austral Pacific chief executive
officer, Thom Jewell, said: "We have a programme to address the company's
short term issues and we're very excited about working toward realizing the
full potential of our Cheal asset in the immediate
term.
"Concerns have arisen from the fact that the Cheal
field has taken longer than expected ? and cost more than expected ? and
has not produced at the production levels anticipated."
As a result, Austral has been unable to meet certain completion clauses
and covenant ratios specified in its agreements with its bankers. Technically,
therefore, the company has had to account for the debt as a current liability.
This was a major component in sparking the 'going concern' comment.
The company has been working closely with its bankers to restructure the
debt, given future plans.
Jewell said: "We have been very fortunate to have such a supportive
banker who is working with us to ensure our short and long term success.
"But, while the directors cited this caution, they also expressed
confidence that the company will be able to continue in operation for the
foreseeable future, and will be able to realize its assets and discharge its
liabilities in the normal course of business," Jewell said.
Commenting further on the development of Cheal,
he said: "We're on track this quarter to drill another two wells that we
expect to boost Cheal production from its current
level of about 600bopd to over 1000bopd.
"Once we've delivered this phase of the Cheal
project, which remains our priority, we can get on with the rest of our long
term strategy including 'Greater Cheal', Kahili and Cardiff.
"We expect this to start later this year, by drilling Kahili-2 and recommissioning the Kahili field,
for which we already have gas sales contracts in place. The field is capable of
delivering 8-10mmscf/day and 250 barrels of condensate per day.
"We will be investing in developing those resources, which we have
confidence will add future value to the company."
Jewell said that while he could understand how the media speculation
arose, it was unfortunate that the full picture was not presented.
"Let's hope we get the same level of coverage and interest when we
announce our next good news!"
[1] As verified by Independent Oil Field Experts, Sproule
International of Calgary, Canada.
Web site: www.austral-pacific.com
Email: ir@austral-pacific.com
Phone: Thom Jewell, CEO +64 (4) 495 0880 or Brad Holmes: +1 (713) 304 6962
None of the Exchanges upon which Austral Pacific's
securities trade have approved or disapproved the contents hereof.
This release includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of applicable
legislation. Other than statements of historical fact, all statements in this
release addressing future production, reserve potential, exploration and
development activities and other contingencies are forward-looking statements. Although
management believes the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not
guarantees of future performance, and actual results or developments may differ
materially from those in the forward-looking statements, due to factors such as
market prices, exploration and development successes, continued availability of
capital and financing, and general economic, market, political or business
conditions. Please see our public filings at www.sedar.com and
www.sec.gov/edgar/searchedgar/webusers.htm for further information.