LGO Energy has offered to pay drilling creditors in company shares in order to conserve cash to pay for production activities in Trinidad.
The company reached an agreement last month with bankers BNP Paribas last month on the crystallisation of the existing funds drawn down in March under the pre-paid swap arrangements for the drilling of seven wells in the Goudron field in Trinidad.
A number of creditors of LGO’s wholly owned subsidiary, Goudron E&P Limited, have agreed to be paid by shares.
The total value of invoices being settled is approximately £0.9 million of a creditor balance of approximately £1.6 million.
This is exclusive of remaining drilling funding of approximately £2.7million drawn down from the BNP Paribas facility.
LGO said these funds were ultimately available to pay creditors subject to further agreement with BNP Paribas.
LGO’s US advisors have also agreed to the payment of their initial retainer, totaling $50,000, in LGO shares.
Chief executive Neil Ritson, said: “To conserve cash resources to deploy in production related activities the Company has agreed to make various payments on behalf of its subsidiary in Trinidad for services received in the 2015 drilling campaign at Goudron. We appreciate the flexibility shown by these creditors and look forward to working with them in the future.”
The company said it continues to work on strategic investments into the business to fund the future development program at the Goudron Field in Trinidad.