CEO's Quarterly Message
“2016 was a year of transition for Oryx Petroleum. We completed the restructuring of our organisation, reducing its cost dramatically, and have focused our remaining resources on core assets. We welcomed a strategic investor, Zeg Oil, who provided us with funding for our capital program and operations. In March we began delivering all of the Hawler Area production to the Kurdistan Export Pipeline at Demir Dagh, with such sales largely uninterrupted and all invoices paid for 2016. In the Hawler license area, we shifted our near term focus to the Zey Gawra field and in December 2016 we began exploration activities in AGC Central, our most promising license area in West Africa, with the acquisition of 3D seismic data.
With the success of the Zey Gawra-1 recompletion we have developed and are starting to implement a capital program focused primarily on the Zey Gawra field in the Hawler license area. The program includes four new wells at the Zey Gawra field and the recompletion of the Demir Dagh-8 well. A successful recompletion of the Demir Dagh-8 well, high in the Cretaceous reservoir, will provide important validation of our horizontal well development plan for the Demir Dagh Cretaceous reservoir. We expect our program will provide us with production and cash flow by early 2018 that can sustain our operations and allow us to meet our obligations.
In order to create the liquidity and financial flexibility needed to execute our capital program and fund our operations we have been working to restructure key liabilities and secure equity funding from our shareholders. To that end we have recently satisfied a significant trade payable with the issuance of common shares, and AOG and Zeg Oil have conditionally agreed to subscribe for additional common shares. The agreed equity subscriptions by AOG and Zeg Oil are conditioned upon the satisfactory restructuring of the contingent consideration obligation related to the Hawler license area and certain other obligations on terms satisfactory to AOG and Zeg Oil.
With our organisational restructuring now complete, we look forward to finalising our balance sheet recapitalisation and implementing our 2017 plans for continued appraisal, development and exploration of our core assets.”