(MENAFN- ProactiveInvestors)
(ASX:APY LON:AZO) said significant progress was made on the Gazelle project in the final quarter of 2014 including the government approval in December.
Also in the month Côte d'Ivoire’s president signed off on 25 years of exclusive exploitation rights for the project area.
In the coming months the company anticipates a decision from Petroci a partner in the venture over a potential ‘back-in’ transaction which would see it acquire an additional 16% stake.
A decision is expected in the second quarter.
Azonto owns 35% of Vioco which in turn owns 87% of Gazelle; should Petroci exercise its ‘back-in’ rights Vioco’s interest reduces to 71%.
The Gazelle progress was matched in parallel with a renewed effort by utility CI-Energies for a power plant an upstream element of the project which will be located near the planned gas processing plant for Gazelle.
Azonto says it expects to see plans and timetables for a power plant development in Côte d'Ivoire ahead of the sanction of the project which is projected for the second quarter.
The company also revealed that work to mature the Hippo North exploration prospect 7km from Gazelle in shallow water now ranks it as the top prospect to add additional resources and although there are no licence obligations a potential well is being planned.
An add-on to the planned Gazelle development drilling programme would significantly reduce the costs of Hippo North the company said.
While operational progress was made the macro-economic environment for oil companies has been challenging and uncertain given the collapse of crude oil prices and to combat the impacts of low oil prices Azonto took what it describes as “difficult but necessary” decisions to minimise expenditure. This involved a scaling back of corporate and admin costs and involved the resignation of a number of directors including former chief executive Rob Shepherd.
After a strategic review Azonto now aims to have lower budgeted costs a renewed focus on its key assets and an accelerated pace in maturing other potential strategic and project opportunities.
“We are taking difficult but necessary measures to minimise expenditure reach project sanction as rapidly as possible and leverage the existing possibilities closer to our Licence Area” said managing director Grégory Stoupnitzky.
“In conjunction with a small number of strategic initiatives we are focused on weathering the macro storm and emerging in a strong position.”
A separate statement revealed Azonto ended December with A$7mln of cash after an outflow of A$817000 in the quarter.
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