Entek Energy has provided an update on the company's activities covering both the onshore, Niobrara resource play and the offshore, Gulf of Mexico, conventional oil and gas assets.

Offshore - Gulf of Mexico, Conventional Oil and Gas

In line with the Company's strategy, the Gulf of Mexico portfolio continues to be rationalized in order to maintain exposure to the offshore conventional resource potential whilst preserving the Company's capital base, allowing the required funds to be deployed in its onshore work program in the Niobrara oil resource play where the potential exists for significantly greater value creation.

Accordingly the Company has completed the sale of its 50% working interest in the VR341/VR342 blocks in the Gulf of Mexico with the consideration being US$7.5 million in cash as well as a significant retained overriding royalty interest.

The sale of Entek's working interest in VR341/342 was made following an extensive review of the risk/reward profile of this asset in the context of the Company's overall development and exploration portfolio and balance sheet limitations. Entek's ongoing participation with a working interest in the development of this asset would have required significant additional capital in the form of both debt and equity which could not be supported in view of current global capital market conditions.

Tags: Entek Energy Limited