Matrix seeks to renegotiate short-term debts

Australian listed oil company Matrix Oil NL announced on Monday that the company is seeking to renegotiate with major creditors and financiers for the rescheduling of existing liabilities after the company was unable to generate sufficient cashflow to pay debts.

Matrix was in cash flow shortage due to the temporary closure of L1well in Langsa Technical Assistance Contract (TAC) offshore North Sumatra, which caused crude production down to 2,000 barrels per day (BPD) from 7,000 BPD prior to the closure. Matrix was forced to close L1 well after encountered technical problems and workover was needed to put the well back into production.

? Matrix is confident to be able to complete the work-over of the L1 well and the re-entry of the L3 well, which would result in a resumption of production at an increased rate of up to 9,000- 9,500 BPD, within the next 4 to 6 months. At oil prices of US$20 per barrel, this would represent gross revenue of US$180,000 to US$190,000 per day (before production costs and Indonesian government profit share). At these levels, sufficient cash flows would be generated to meet all commitments and provide a solid return to Matrix,? the company said in a statement.

At the end of February 2002, Matrix had cash reserves of A$9.8 million and payables of approximately A$36.0 million.

It is expected that the successful completion of current negotiations will lead to a rescheduling of these liabilities so that payment is made from future oil revenues, after the L1 well is re-opened and full production resumes.

Matrix, which has 90 percent working interest in Langsa TAC, started flowing oil in November 2001. (alex)