2016 has been a year of major transformation and restructuring for your Company after many years of unsuccessful exploration, high costs and a distressed share price.
In last year's annual report I wrote that your new board's first task in 2016 was to complete a review of the Company's existing assets and to develop a strategy to restore and generate shareholder wealth.
And indeed this is what has occurred. During 2016 shareholders approved a name change from Pryme Energy to Indago Energy and a re-structure of the issued capital on a one for ten basis. Indago has also sold non-performing assets and has entered into an agreement to buy an exceptional heavy oil technology.
After a review of the Company's assets, both the Capitola Oil and the Four Rivers projects were sold for a combined total of A$3.1m. The internal review concluded that those assets had limited potential to generate meaningful value for shareholders.
A review of the Company's Newkirk project in Kay County Oklahoma, concluded that Indago's leases are prospective for oil and gas but require a successful well appraisal programme, of up to four wells, prior to assessing development options. Indago's partner (and Operator) Empire Energy Limited, is contemplating a well test programme in mid 2017. Indago's participation in that programme will depend on well costs and final well locations proposed by the Operator.
For the financial year ended December 31, 2016, Indago recorded a Total Comprehensive Loss of A$1,145,520.
The most significant event for 2016 occurred in October when Indago signed a Memorandum of Understanding to acquire the companies and associated Intellectual Property of Hydrocarbon Dynamics - a business and technology that can be applied to improve oil flow rates by the re-liquification of heavy oil depositions in wells and pipelines.
Shareholders will be asked to vote on this transformative acquisition on 3 April, 2017. If approved, Indago expects a significant proportion of its resources will be devoted to the development of both sales of the HCD product line to oil producers and pipeline companies, and also to the identification of, and investment in, upstream oil projects where Indago can apply this new technology in a concerted effort to develop both reserves and production.
While it is pleasing to see that Indago's share price has started to recover from the historical lows of the previous year, your board is cognisant of the significant work that remains to develop a sustained and significant uplift in shareholder value.
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About Indago Energy Ltd
Indago Energy Ltd (ASX:INK) (OTCMKTS:POGLY) is an Australian listed company engaged in oil and gas exploration, development and production. Indago's project portfolio includes liquid rich producing assets together with substantial oil development and exploration acreage in the United States.
The Company's Exploration and Production focus is on high growth oil and gas projects offering scalability of production, cash flows and reserves. Indago currently has several producing projects together with a significant acreage position. The Company's immediate focus is the development of its Capitola Oil Project located in an active region of the Cline Shale resource play along the Eastern Shelf of the Permian Basin, Texas. The project's core development and exploitation opportunities are shallower multiple "stacked" sandstones and limestones to depths of 7,000 feet which are effectively produced from vertically drilled wells. Indago's value driven model is executed through exploiting shallower, well defined intervals with advanced completion and stimulation technology within known produced oil fields together with exposure to the emerging Cline Shale resource play.
Indago's shares are publicly traded on the Australian Securities Exchange (ASX ticker: INK) and also as American Depositary Receipts on the OTCQX (ADR ticker: POGLY).
Indago Energy Ltd