OilVoice - Leni Gas & Oil Divests Hungarian Interests

Leni Gas & Oil Divests Hungarian Interests

Monday, March 08, 2010

Leni Gas & Oil has decided to divest its Hungarian assets. As a result of the company's on-going reserves and resource review, the investments in the ZalaGasCo and PetroHungaria ventures are now considered non-core. According to LGO, the decision enables it to divert additional capital resources to its core operations and accelerate its exploration plans.

The oil and gas explorer held a 14.54% stake in ZalaGasCo Kft and 7.27% of PetroHungaria Kft. LGO and its advisers, Equipoise and Eclipse Petroleum Technology, have assessed both investments in detail and concluded neither venture will provide a material return on the company's Hungary investment of €2m. The company has therefore decided to relinquish its interest in both ZalaGasCo and PetroHungaria, and write off the Hungary investment.

Subsequently the corresponding Hungarian development capital, will be reallocated to the other countries of operations.

LGO noted that it is currently finalising the first corporate reserves and resources revision for all countries of operation, and revision is scheduled for issue in mid-March. The review will include the results of the re-processed seismic interpretation for the Spain acreage and an audit of all existing resources reports for the other countries of operation, according to the PRMS standard.

'This information will provide the company and our shareholders with a quantum improvement in the resources knowledge for all countries of operation and allow us to optimise all exploitation strategies and plans to maximise the potential of each country investment", Leni Oil & Gas executive chairman David Lenigas said.

Subsequently, the emerging resource company has assets in Spain, the Gulf of Mexico, Trinidad and Malta. LGO owns 100% of the Ayoluengo Oilfield in northern Spain, through its wholly owned subsidiary Compañia Petrolifera de Sedano. The company owns 28.94% in Byron Energy, which in turn owns varying working interests, between 10% and 25%, in the Eugene Island joint venture in the Gulf of Mexico.

In Trinidad the company owns a 50% interest in both the Icacos Deep prospect and the Icacos oilfield. LGO also has a 10% stake in the Malta Southern Offshore exploration play.