DARWIN, Australia (Dow Jones)--ROC Oil Ltd. (ROC.AU) Chief Executive Bruce Clement Wednesday said that a recent recovery in oil prices means the company should be able to fund development of its Bass Strait and Chinese projects over the next few years without having to sell any more assets.
Clement, however, said ROC may have to consider its asset ownership mix, or an equity raising, if oil prices fall again and reduce its cash flow.
He reiterated that ROC will consider a full sale of the company at the right price and hasn't received any formal offers yet.
ROC plans to develop the Basker Manta Gummy project offshore Victoria state over 2010 and 2011. Clement gave a broad cost estimate of its 30% share of the project's costs at "couple of hundred million dollars".
Last month it sold 10% of Basker Manta Gummy to Indonesia's Pertamina for US$31.5 million after hiring advisers Gresham Partners to conduct a strategic review of its business.
ROC also wants to make a final investment decision on development of the Beibu Gulf project in China by year end. Development costs there have been estimated at about A$350 million and ROC is expected to end up with a 19.6% stake in the asset when China National Offshore Oil Corp. farms into the project, Clement said.
"At Brent oil less than US$50 a barrel we're doing US$100 million cash flow and we're aiming for similar in the next two years," Clement told Dow Jones Newswires on the sidelines of an industry conference.
"If oil stays between US$60 and US$70 our funding requirements will be considerably less. We have good leverage to the oil price."
ROC is aiming to restructure its core banking facility, which amortizes in 2011, by near the end of the year, Clement said. "We're not rushing because this is not the best time in the world of debt to be doing it," he said.
Clement said ROC is happy with performance of its non-core, British assets and isn't actively looking to sell them.
In the case of a funding shortfall, Clement said ROC would need to "consider the right asset mix or balance".
"Then there's always (raising) equity in the background," he said.
"At 66 cents, our share price looks a lot better than 44 cents."
"I think our share price will rise as we deliver on the production and operating side of the business," he said.
At 0215 GMT, Roc's share price was up 2.3% at 67.5 cents compared with a 0.6% rise in the overall market
-By Ross Kelly, Dow Jones Newswires;
Clement, however, said ROC may have to consider its asset ownership mix, or an equity raising, if oil prices fall again and reduce its cash flow.
He reiterated that ROC will consider a full sale of the company at the right price and hasn't received any formal offers yet.
ROC plans to develop the Basker Manta Gummy project offshore Victoria state over 2010 and 2011. Clement gave a broad cost estimate of its 30% share of the project's costs at "couple of hundred million dollars".
Last month it sold 10% of Basker Manta Gummy to Indonesia's Pertamina for US$31.5 million after hiring advisers Gresham Partners to conduct a strategic review of its business.
ROC also wants to make a final investment decision on development of the Beibu Gulf project in China by year end. Development costs there have been estimated at about A$350 million and ROC is expected to end up with a 19.6% stake in the asset when China National Offshore Oil Corp. farms into the project, Clement said.
"At Brent oil less than US$50 a barrel we're doing US$100 million cash flow and we're aiming for similar in the next two years," Clement told Dow Jones Newswires on the sidelines of an industry conference.
"If oil stays between US$60 and US$70 our funding requirements will be considerably less. We have good leverage to the oil price."
ROC is aiming to restructure its core banking facility, which amortizes in 2011, by near the end of the year, Clement said. "We're not rushing because this is not the best time in the world of debt to be doing it," he said.
Clement said ROC is happy with performance of its non-core, British assets and isn't actively looking to sell them.
In the case of a funding shortfall, Clement said ROC would need to "consider the right asset mix or balance".
"Then there's always (raising) equity in the background," he said.
"At 66 cents, our share price looks a lot better than 44 cents."
"I think our share price will rise as we deliver on the production and operating side of the business," he said.
At 0215 GMT, Roc's share price was up 2.3% at 67.5 cents compared with a 0.6% rise in the overall market
-By Ross Kelly, Dow Jones Newswires;
