place in pre open at company's request, page-5

  1. 33,190 Posts.
    lightbulb Created with Sketch. 610
    they are still in business towie Slowly Slowly

    Advice re Interest in Seram JV

    Document date: Wed 11 Dec 2002 Published: Wed 11 Dec 2002 20:42:31
    Document No: 229539 Document part: A
    Market Flag: Y
    Classification: Other

    HOMEX - Perth

    As part of a review process of the Company's assets initiated by the
    new Board Members (Eddie Smith, Doug Jendry) it became evident that
    the Company's 2.5% interest in the Seram JV was in danger of
    forfeiture as a result of the Company having not paid certain cash
    calls owed to Kufpec (Indonesia) Limited ("Kufpec"). Those
    outstanding cash calls had been the subject of a Default Notice
    received on September 12th 2002 from Kufpec which, after 90 days of
    receipt of such Notice, would have resulted in Kufpec having the
    right to enforce forfeiture of Kalrez's interest.

    The non-payment of these cash calls was due to:

    * settlement delays in funds owing to the Company;
    * the withdrawal of a debt facility previously offered to the Company
    by it's former manager, Kalgoorlie Mine Management Pty Ltd; and
    * offset arrangements agreed with Kufpec.

    The Board believed it prudent to suspend trading in the Company's
    shares whilst it satisfied itself as to a number of issues associated
    with and arising from the Default Notice.

    We can now confirm that the Company has paid the amount of
    US$867,932.28 from its own resources, being outstanding cash calls
    and interest charged, and is no longer in a default position with

    This will bring the amount now invested in the Seram JV by Kalrez
    Energy to A$4.95M (excluding acquisition costs).

    There remain two outstanding cash calls owing to Kufpec in the sum of
    US$227,076. A Default Notice has not been issued in this sum. However
    in the event that a Default Notice is received the Company will have
    90 days to pay the outstanding amount, together with any associated
    interest. The Company has an oil lifting currently scheduled on
    December 14th 2002, which will result in the receipt of net proceeds
    in early February 2003 of approximately US$850,000, allowing Kalrez
    to satisfy these outstanding cash calls within a timeframe acceptable
    within the Terms of the Joint Operating Agreement that governs the
    Seram JV.

    There will be further cash calls to be paid in the forthcoming months
    as Kufpec finalise the construction of the Main Production Facility
    to process crude from the Oseil Oilfield. The oilfield is currently
    scheduled to commence production through a Temporary Production
    Facility on December 19th, and to start producing cash returns from
    February 2003 onwards.

    Whilst the Oseil cash flows will help defray ongoing cash calls it is
    evident that the Company needs to replace the previously offered debt
    facility. To that and we can advise that we are in discussion with
    two interested debt providers, whilst also continuing to pursue other
    avenues. One of the parties is also offering access to new technology
    that may assist to increase production from low yielding oil
    reservoirs such as Kalrez's Bula oilfield.

    The Board of the Company is of the opinion that the combination of:

    * An available short term debt facility;

    * Pertamina funds anticipated in February; and

    * Likely cashflows from the Oseil oilfield commencing in February;

    that the Company has sufficient working capital to meet its
    requirements between now and beyond the end of the next quarter.

    As a result we would like to request that the Trading Suspension now
    be lifted.

    We will advise of any changes to this situation is and when they

    Any further queries on this issue should be directed to Mr Simon
    Lill or Mr Eddie Smith at the Company's offices.

    E Smith

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.