AED 0.00% 14.5¢ aed oil limited

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    AED Oil, the listed minnow that has suffered huge problems with its development of the Puffin oil field in the Timor Sea, appears to be negotiating a bailout by a North American oil and gas operator.

    The troubled company yesterday requested a "voluntary suspension" of its shares from the stock exchange, where they had been in trading halt since Friday. They last traded at $1.85 after reaching a peak close of $11.40 on October 17.

    The company was floated in 2005 on the basis it would achieve Puffin production at about 30,000 barrels a day, but by December last year, only three months into production, output had fallen to between 6000 and 10,000 barrels a day.

    Directors said they were negotiating with a significant company over its taking a major interest in AED's assets. If an agreement was reached, AED would be able to extinguish its bank debt and repay creditors and would also end up with extra cash to spend on development and exploration opportunities.

    Sources said it appeared likely that negotiations were with a mid-ranked North American firm with production experience.

    Both Canadian-based Talisman Energy, which already has Timor Sea interests, and Houston-based Apache, the biggest independent gas producer in Western Australia, were considered by analysts as possible AED farm-in partners.

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