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MGM offers ‘bright’ spot
MGM Energy expects to run up losses for the foreseeable future while it lives in hopes that the Mackenzie Gas Project will proceed, but a Korean investment in one of its Arctic assets should cover its capital and operating costs into 2012, the junior explorer said.
It reported the closure in March of the sale of a 20 percent stake in the Umiak significant discovery license to Kogas Canada, a unit of state-owned Koreas Gas Corp., for C$30 million.
MGM said the down payment of C$20 million from Kogas is the bright spot on its horizon, given that it has no production and none is expected until crude oil and gas can be moved from the Canadian North.
MGM had stopped drilling During the lull in regulatory, government and corporate decision-making on the MGP, MGM stopped drilling new wells last year, but it did conduct some minor drilling and logistics work related to its Windy Island J-39 well, which was completed early this year. There were also some costs related mainly to the renewal of a land parcel in the Mackenzie Delta.
The company said it incurred about C$1 million in exploration costs for the acquisition of seismic data in the Great River basin of the Central Mackenzie Valley.
In the fourth quarter it also recovered C$900,000 of previously expensed minimum expenditure commitments.
MGP reported a net loss of C$19.93 million, or 7 cents a share, for 2010, compared with a loss of C$50.32 million, or 19 cents a share, in 2009. Capital spending last year decreased to C$3.32 million from C$54.32 million in 2009.
—Gary Park
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