Winstar Resources Ltd reports that it has retained FirstEnergy Capital LLP (“FirstEnergy”) to initiate a process to explore and evaluate potential strategic alternatives with a view to enhancing shareholder value.
FirstEnergy, as financial advisor to the Board, will assist in the process of analyzing and evaluating prospects and options to the Company which may include a strategic investment, cash infusion, joint venture, merger, sale or other alternatives. The Company has not set a timetable for the completion of the review process and it does not intend to comment further regarding the review process unless a specific transaction is approved by the Board of Directors, the review process is concluded or it is otherwise determined that further disclosure is necessary.
Winstar is scheduled to release its Q2 2012 financial and operating results in mid August 2012. Preliminary production estimates indicate that Q2 2012 results will be between 1,100 and 1,300 boepd, notwithstanding current well deliverability of 2,400 to 2,600 boepd.
Lower production from Tunisian operations is the result of mechanical issues with our natural gas purchaser and labour unrest at our operating properties in Southern Tunisia. Gas sales have recently resumed but at less than stable rates and lower nominations than realized during Q1 2012. Third party compression and gas processing mechanical issues are expected to be partially resolved within the near term and fully resolved by November 2012.
During Q2 2012, Winstar had been impacted by labour unrest at its three Southern Tunisian Concessions; namely Sanrhar, Chouech Essaida and Ech Chouech. During that period the company’s production in Southern Tunisia was shut-in for a period of eleven days. The effect of the strikes and resulting shut-ins was the temporary elimination of over 1,200 boepd of production and, subsequent to the recommencement of operations, decreased performance at several Triassic oil wells. The decreased performance of several Triassic oil wells has temporarily eliminated 400 to 500 boepd which is expected to be remedied over the next few weeks. The Company is pleased to announce that it has successfully negotiated a definitive agreement with its regional staff and relevant unions and no further labour disputes or production disruptions are expected.
Winstar’s 2012 Tunisian capital program will remain intact as previously reported, however it is expected that the program which was expected to commence in June, will now be delayed until July or August 2012. In Romania, the Company is finalizing its plans to conduct an 80 square kilometer seismic acquisition program in August and September over its recent gas discovery at Moftinu.