Mayan raises £0.6m, starts work at Shoats Creek

The AIM-traded firm said the proceeds would be used to fund ongoing working capital and the Shoats Creek Field development.

It also confirmed that weather and terrain conditions at Shoats Creek had improved significantly, which allowed for the mobilisation of equipment to the Lutcher Moore 13 Shallow-Well to commence the re-entry, squeeze and perforation program, which the board had referred to in earlier announcements on 13 and 21 March.

As the company had previously reported, a re-entry and squeeze of LM 13 will be performed, with the objective of isolating the pay formations identified at 2,600 and 2,900 feet.

Once the cement job has been completed, the well will be perforated and swabbed, first at the 2,900 level and if necessary at the 2,600 level.

A determination as to whether the formations are oil bearing was expected within the first two weeks of work on the well.

Also as previously reported, once the new zone had been proved, further work will be required to complete the LM 13 Shallow-Well and install surface equipment, and the board said further announcements concerning its economic viability and sustainable production rates would be forthcoming in due course.

The next stage of the rework of the LM-20 well would then follow on from work on the LM13-Shallow-Well.

Mayan has a 50% working interest and 37.7% net revenue interest in the LM-13 Shallow Well formation.

The company also has a 20% working interest and 15.08% net revenue interest in LM-20 in respect of oil, and a 50% working interest and 37.7% net revenue interest in respect of gas.

Mayan said the subscription was conditional on admission, and application would be made for the subscription shares, which will rank pari passu with the existing ordinary shares, to be admitted to trading on AIM.

It was expected that admission would become effective and dealings in the subscription shares would commence on or around 5 April.

“Given the recent delays and operational difficulties at Shoats Creek, the company is pleased to have completed the subscription today,” said CEO Eddie Gonzalez.

“This, along with recent non-core disposals, will improve the company's treasury position whilst the work at Shoats is ongoing.

“We are looking forward to announcing the results from LM 13 as they come through, and as I have said before, if LM 13 plays out, we expect it could have a major impact on our thoughts as to the development of Shoats.”