Gas2Grid Limited - Quarterly Activities Report for June 2024
GAS2GRID LIMITED (GGX) Share Update July 2024 Tuesday 30th
Gas2Grid Limited Reports Quarterly Activities and Financial Update
Gas2Grid Limited (ASX: GGX) has released its quarterly activities report for the period ending 30 June 2024, detailing significant developments in its oil and gas exploration ventures in the Philippines and financial updates.
Instant Summary:
- Application for a new Service Contract in Cebu, Philippines.
- Approval for publication of the nomination in local newspapers.
- Continued discussions for joint venture participation in the Philippines.
- Assessment of company-owned rigs in Cebu for future operations.
- Unsuccessful application for a new exploration area in Queensland, Australia.
- Legal claim against the French Government for non-renewal of St. Griede.
- Suspension of securities from ASX quotation due to non-compliance with Listing Rule 12.1.
- No payments to related parties during the quarter.
New Service Contract in Cebu
In July 2023, Gas2Grid Limited commenced the application process for a new Service Contract over an area previously covered by SC 44 in Cebu, Philippines. The Department of Energy completed its review and assessment in July 2024 and approved the publication of the nomination in two local newspapers for public submissions, in compliance with government procedures. This new Service Contract, if granted, will provide a 7-year initial term, allowing the company to continue its oil and gas appraisal and exploration activities.
New Ventures and Joint Ventures
The company is advancing discussions with entities operating oil and gas ventures in the Philippines for joint venture participation. To prepare for the use of its Rig 1 and Rig 2 located in Cebu, Gas2Grid dispatched its consulting engineer and rig operators to assess the work required to bring the equipment to operational readiness. The team also updated the cost assessment for drilling new wells in the Philippines using the company’s rigs and consulting personnel.
Unsuccessful Application in Queensland
Gas2Grid’s application for a new exploration area in the Bowen-Surat Basin, Queensland, under a gazettal program issued by the Queensland Government, was unsuccessful. The company continues to explore other opportunities in the region.
Legal Claim in France
On 7 April 2024, Gas2Grid lodged an appeal in the Administrative Court of Appeal in Bordeaux against the November 2023 decision of the Pau Tribunal in its financial claim of €34.35 million against the French Government. The Pau Tribunal had determined that the French State pay Gas2Grid €60,342.25, with interest accruing from 24 July 2019. The balance of the company’s financial claim was dismissed, and the company awaits the appeal hearing for a final decision.
ASX Listing Rule 12.1 Compliance
Gas2Grid’s securities were suspended from quotation on the ASX on 1 September 2023 due to inadequate operations to warrant continued quotation. The company believes that the grant of a new Service Contract or a farmin agreement in an existing Service Contract in the Philippines will assist in demonstrating compliance with Listing Rule 12.1, and will seek reinstatement of quotation in that event.
Financial Update
As of 30 June 2024, Gas2Grid reported cash and cash equivalents of $19,000. The company’s net cash used in operating activities for the quarter was $56,000. The company has unsecured loan facilities totaling $5.034 million, with $1.505 million drawn at quarter-end. The company has deferred payments for services provided by related parties and their associates, with no payments made during the quarter.
The approval for a new Service Contract in Cebu and ongoing joint venture discussions could positively impact Gas2Grid’s future operations and financial stability. However, the unsuccessful application in Queensland and the legal claim in France present challenges. The suspension of securities from ASX quotation due to non-compliance with Listing Rule 12.1 adds further uncertainty. Overall, the potential grant of the new Service Contract in Cebu is a critical factor for the company's future prospects.
Investor Reaction:
Analysts are likely to view the approval for publication of the new Service Contract nomination in Cebu positively, as it indicates progress in the company’s exploration activities. However, the unsuccessful application in Queensland and the ongoing legal issues in France may raise concerns about the company’s ability to expand its operations and resolve outstanding claims. The suspension of securities from ASX quotation is also a significant factor that investors will closely monitor.
Conclusion:
Investors should keep a close watch on the developments regarding the new Service Contract in Cebu and the outcome of the legal claim in France. The company's ability to secure joint venture partnerships and comply with ASX listing requirements will be crucial for its future growth. Staying informed about these key developments will help investors make well-informed decisions about their investments in Gas2Grid Limited.