Troubled oil firm Antrim Energy (AEY:AIM) gains 34.8% to 5.56p as the market reacts to a $53 million cash sale of a large slice of its UK assets to privately-owned First Oil Expro.
The deal, announced late on Friday (7 Feb), should leave the group debt-free but today’s rise is worth keeping in perspective – Antrim is still a long way short of its 30p+ trading range seen a year ago.
Like a number its peers in the junior oil space it has been hit by a funding shortfall and the share price collapsed as the firm struggled to secure additional financing to meet higher than anticipated costs on its Causeway development and to satisfy ongoing payment and oil swap obligations with Credit Suisse.
Causeway is in the package of assets being sold and assuming the transaction completes – it has been unanimously approved by Antrim’s board – the company expects to be free of all its liabilities and have $17 million to $18 million of working capital left at its disposal. The agreement includes provision for payment of a liquidated damages fee of $5.3 million under certain circumstances if it does not proceed.
Antrim is retaining its Fyne and Erne licences in the North Sea and the FEL 1-13 block in Ireland’s Porcupine basin. It is partnered on Fyne by fellow Aim-quoted play Enegi Oil (ENEG:AIM) (up 1.3% to 7.6p) with a plan to develop the field using a low-cost unmanned buoy solution.