Advance Energy PLC (AIM:ADV) told investors its partner Carnarvon Petroleum has decided not to enter the next exploration phase of the TL-SO-T 19-14 Production Sharing Contract, which hosts the Buffalo project, and the licence now lapses.
As a result, the company now becomes a cash shell under AIM market rules.
The rules stipulate that the company is required to make an acquisition, or acquisitions, which constitutes a reverse takeover within six months from May 27 2022. Alternatively, it can opt to become an investing company which would also require it to raise at least £6mln and submit a new admission document.
“The company continues to evaluate a number of oil and gas opportunities, with an emphasis on materiality and cash flow generation in line with its stated strategy,” it said in a short statement.
“Further announcements will be made as and when appropriate.”
In February, Advance Energy’s newly appointed chief executive detailed the company’s plans to find new ventures following disappointing results in January.
Speaking with Proactive, Larry Bottomley revealed investment plans for the company’s recovery with the company looking at opportunities that have free cash flow and production.
Bottomley, in February, said the company hoped to deliver on opportunities before the end of the year.
“We have aggressively taken a strict capital discipline process in terms of our cash management. The reduction in overheads gives us the headroom, and for us most importantly it gives us the time to undertake the activity that we’re working through,” he said.