The Sydney, Australia-based Gas2Grid Limited (ASX: GGX) is engaged in the exploration of oil and gas in France and the Philippines. Its basket of projects includes a 100% interest in the Service Contract 44 covering ~750 km2 on Cebu Island in the Philippines; and secondly the St Griede license covering ~653 km2 situated in onshore Aquitaine Basin, France.
On March 6th, 2019, the company released an announcement informing the market that the Appeal Court of Bordeaux has issued its verdict on March 5th, 2019 in France following the hearing held on February 5th, 2019, with respect to the appeal lodged on January 3rd, 2017 by the French Government against the Pau Tribunal’s November 2nd, 2016 decision relating to the renewal of the St Griede Permit.
The conclusion of the decision handed down by the Appeal Court includes nullification of the previous judgement by Pau Tribunal given on November 2nd, 2016, whereby the Ministers were directed to sanction an extension of the St Griede permit for 5 years from the date of that judgement; the Ministers have now been asked to reconsider the request for a new extension within 2 months of the latest Judgement by the Appeal Court; and the government is to pay EUR 2000 to Gas2Grid for costs. In the case of non-compliance by the Ministers, a penalty of EUR 1000 per day will be imposed.
Meanwhile, the company is amidst consultation with its lawyers in France to pan out the best course of action beneficial for its shareholders after the latest judgement.
In hindsight, the concerned permit was due for its first renewal in May 2013, for which an application was submitted in January 2013, after an initial 5-year term, when the previous terms and conditions of the work and expenditure commitments had been met. In September 2015, the French Government refused the approval for the same following which the Pau Tribunal in November 2015 handed a judgement in favour of Gas2Grid. Since then, after a series of appeals and hearings, the conclusion has now been achieved.
The previous quarter ended December 31st, 2018, was quite eventful for Gas2Grid, as reported. In the Philippines, the company negotiated a new onshore petroleum appraisal project for farmin/purchase and developed strategies to drill new wells on wholly owned rigs as part contribution to earn equity in new ventures, minimising cash investment. Besides, it also finished planning the move of Rig-2 from Malolos-1 to NM-1 site, for which the deepening and testing works are scheduled to begin in March/April 2019 after assigning the service providers.
At the end of the quarter, the had net cash and cash equivalents stood at AUD 674k, with outflows of AUD 81K from operating activities. The company estimates cash outflows of approximately AUD 160K for the next quarter.
Gas2Grid has a market cap of AUD 4.58 million with ~ 1.14 billion outstanding shares. The GGX stock last traded on February 28th, 2019, at a selling price of AUD 0.004.
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