L&M delists with $4.88m cash

Chris Timms.
Chris Timms.
Southern methane gas explorer L&M Energy - which is about to be delisted from the stock exchange following a successful almost $13 million takeover - will bow out of the public eye holding $4.88 million cash in hand and with several Taranaki drilling programmes planned.

L&M chairman Geoff Loudon, who heads New Dawn Energy, initially lent L&M a $6.32 million bridging loan in June, but by October launched his full-100% takeover offer as L&M was having difficulty raising cash.

The takeover and compulsory acquisition of the 10% of outstanding shares was completed last week, with L&M scheduled to be delisted from the New Zealand stock exchange on February 5, then the Australian exchange the following day. The takeover values L&M Energy at $56.7 million.

In its likely last release of information, L&M booked its cash flow and activities reports on the NZX yesterday.

Net operating cashflows for the previous year were costs of $3.54 million, including $970,000 for the quarter to December, with Mr Loudon's bridging loan of $6.3 million ultimately leaving $4.88 million cash at the end of year/quarter to December.

Craigs Investment Partners broker Chris Timms said the $4.88 million would likely keep New Dawn in exploration cash for more than a year, depending on the extent of drilling undertaken.

''L&M were burning about $1 million cash per quarter, or $300,000 a month,'' he said.

During the quarterly period, L&M maintained its tenements in Southland and South Otago and also Taranaki, relinquishing none of its permitted areas. Nor did it apply for any new tenements.

The operational activity report for the quarter focuses on onshore Taranaki Basin exploration, in a 3-D seismic programme near adjacent production oilfields.

A separate Taranaki joint venture planning drilling was interrupted by a gas leak, which had since been sealed in mid-January, with plans for drilling now restarted.

simon.hartley@odt.co.nz

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