Gulfsands Petroleum shares slump 16% after it warns on finances

The company which operates in Syria, Morocco, Tunisia and Colombia, said the need for new working capital funding is "immediate" and discussions with shareholders are "underway urgently" to secure necessary funds.

The cash call comes after Gulfsands Petroleum said it's got $3m for new capital after deduction of current liabilities.

"In order for the group to implement the anticipated minimum work programme for Morocco, set out above, excluding the acquisition of new seismic data on the Fes block, it will need to invest approximately $11m in capital expenditure over the next 12 months with much of this to be committed to in the next three to six months," the company added.

Gulfsands Petroleum will need to fund its business running costs for the next twelve months, "including the one-off costs of the restructuring of our corporate overhead and of our operations in Tunisia and Colombia, which are estimated to total $8.5m."

It added that if the company were to reduce the scope of its activities to simple "care and maintenance" of the Syrian assets, these running costs could be reduced dramatically further.

Worse still for the company, it said that lenders behind its 'Arawak Energy Loan Facility' which stands at $10m, have requested that Gulfsands provide them with proposals for the repayment of the outstanding loan balance. "Inclusive of interest and pre-payment penalties the loan balance to be settled could amount to $11 million. This amount is in addition to the operational funding requirement," the company said.