(MENAFN- ProactiveInvestors)
West Africa-focused (ASX:APY LON:AZO) said in its annual report 2014 was “a story of two halves” for the company.
The first half was one of optimism about the development of its Gazelle project in Côte d’Ivoire with management also sizing up a number of other promising opportunities in West Africa but the second half saw interest in funding small oil & gas companies wane as the oil price collapsed.
The company was quick to move to cash conservation mode in response so it could pursue the development of the Gazelle project.
Azonto is targeting sanctioning of the project by the authorities in the summer of this year after which the plan is to drill an exploration well probably in the second half of the year.
Meanwhile Azonto and its partner Vitol have continued to mature the Hippo North prospect which is located 7km from Gazelle in shallow water of 70 metres.
“Hippo North is now ranking high in the CI-202 [offshore block] exploration portfolio to deliver potential additional gas resources to complement the Gazelle Field.
In addition Azonto and its CI-202 partner Vitol recognise that there would be synergies in combining a Hippo exploration well with the Gazelle drilling campaign which can significantly reduce the cost of the exploration well.
If successful this prospect will extend the production profile on Gazelle by feeding through the existing facilities being planned for the project.
A final decision on the drilling of Hippo North will need to be made by 7th October 2015 subject to budgetary approval” the company said.
Broker RFC Ambrian said it remains confident Azonto will proceed to Gazelle project sanction in 2015 given that Vioco has been consistently reassured of the political importance ascribed to the project by the authorities in Côte d’Ivoire.
“Azonto will have to pay its share of exploration costs and we believe that the company will either have to raise new capital or farm down its interest for work programme carry before any drilling in 2H15.
"We believe that the main near-term stock catalyst will be news on the development of the Gazelle gas/condensate field (reserve-based bank lending and/or project sanction)” the broker said as it reiterated its ‘speculative buy’ rating on the stock.
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