Molecular Energies, the international energy company, provides an update on corporate and trading matters.
Key Points:
• Tapir x-1 exploration well, Paraguay, suspended. Participants reviewing next steps
• Positive cash receipts from Argentina continue
• Strategic developments with regards to Green House Capital Group including receipt of UK government EIS advance assurance
• Sustainable Aviation Fuel studies progress
TAPIR X-1
The Paraguay exploration well Tapir x-1 has been suspended due to tough drilling conditions without reaching the target zone. The drilling rig has been retained on site pending further decision by the participants, taking into account the risk-reward ratio of the well. Further information will be provided at the relevant time subject to confidentiality and regulatory restrictions. Investors are reminded that this was frontier exploration with an estimated 17% chance of success.
ARGENTINA CONTINUES POSITIVE CASH CONTRIBUTION
Molecular is pleased to announce that President Petroleum S.A., the former subsidiary of Molecular, has continued to pay down the US$13 million of debt due to Molecular. Approximately US$1.28 million has now been paid down within the last four months and expectations are that funds will continue to flow.
GREEN HOUSE CAPITAL GROUP ("GHC")
Significant progress has been made in relation to GHC, which will be subject to a separate announcement early next week. GHC has been granted EIS advance assurance by HM Revenue & Customs ("HMRC") in relation to the UK government's EIS scheme. Based on the receipt of EIS advance assurance, the directors of GHC also believe that a prospective investment in GHC should constitute a 'qualifying holding' for a Venture Capital Trust ("VCT").
SUSTAINABLE AVIATION FUEL ("SAF")
As previously announced, studies commenced with Aecom, the worldwide engineering consultancy, to investigate the feasibility of Molecular moving into the business of SAF. These studies continue to progress before any final decisions are made.
The skill set of Molecular, its management and its related parties as well as its knowledge of multi-lateral funders and institutions supportive in principle of SAF projects, place Molecular in a beneficial position should the results of the feasibility studies prove positive.
SAF has a captive, permanent and increasing future offtake market as airlines around the world have committed to increase the use of this product. Production is a complex process and requires a substantial investment. Further updates will be made in due course.
ATOME PLC
Molecular notes the progress of Atome and the Board remains of the view that Molecular's investment in Atome will generate substantial shareholder value for Molecular shareholders in future.
Peter Levine, Chair, commented:
"The result of the Tapir x-1 well, whilst disappointing, is not surprising given it is the frontier exploration. Sometimes it is the better decision in tough drilling conditions to make a bold resolution to suspend rather than continuing in escalating cumulative down hole issues, especially taking into account the risk-reward ratio.
"The progress being made in Green House is promising, as is the continued cash flow coming from the previously disposed Argentine business. This bodes well for the future and complete collection of the US$13 million intercompany debt."