Business
Corporate and Operational Update
Corporate and Operational Update.
About this update from Beacon Energy Plc
[{"type":"text","content":"\n\n27 August 2024\nBeacon Energy plc\n(\"Beacon Energy\" or the \"Company\")\nCorporate and Operational Update\n \n \nBeacon Energy (AIM:BCE), the full-cycle oil and gas company with a portfolio of onshore German assets through its wholly-owned subsidiary, Rhein Petroleum GmbH (\"Rhein Petroleum\"), provides the following corporate and operational update.\n· It has become clear that the electrical submersible pump (\"ESP\") is running at the lower limit of its operating range - approximately 50 bopd - and as such the SCHB-2 well has not yet been able to achieve a stabilised flow rate\n· Plans are well advanced to re-install a rod pump (at a cost of approximately €75,000) in the coming weeks which is expected to allow a stabilised flow rate to be achieved\n· In order to maximise the cash generation of the Rhein Petroleum business, cost reduction measures are actively being pursued\n· The Company has entered into a formal three-month process with the creditors of Rhein Petroleum, with the aim of agreeing a reduction in liabilities and a deferred payment plan based on future cash flow generation\n· The Company is in the process of putting forward a restructuring plan to creditors aimed at maximising cash generation from the Rhein Petroleum business\nThe Company has undertaken a thorough review of the Rhein Petroleum cost base in order to maximise cash generation. Cost reduction measures are actively being pursued and these initiatives are anticipated to reduce Rhein Petroleum's annual cash operating costs from approximately €2.5 million currently to approximately €1.3 million. Such cost reduction measures are likely to be fully implemented by year end 2024.\nIn order to provide more optionality for the Company as it seeks to establish the optimum route forward, the Company engaged with approximately 90% of the creditors of Rhein Petroleum with the aim of agreeing a reduction in liabilities and a deferred payment plan based on future cash flow generation of Rhein Petroleum. Unfortunately, an agreement with all creditors could not be reached and as a result the Company took the decision to place Rhein Petroleum into a formal process with its creditors (akin to US Chapter 11 bankruptcy protection). This three-month ...