December 27, 2006, 7:54PM EST text size: TT
Pebercan intensifies talks over debt
Pebercan Inc. said Wednesday it has intensified negotiations with Cuban
authorities over a late payment of $69 million owed to it and partner
Sherritt International by Cubapetroleo SA.
As of Dec. 31, Peberco will be owed $37 million, or 55 per cent of the
balance outstanding for the development and operation of the Block 7
oilfield, while the rest will be owed to Sherritt International Oil and
Pebercan has five exploration concessions in Cuba, including Block 7,
which is the only one operated to date. The company sells all of its
production to state-owned Cubapetroleo SA, also known as CUPET.
Besides seeking the money that it claims is owed under agreements with
CUPET, Pebercan is still determining the amount it will invest in 2007
to develop the oil assets.
Pebercan said its proportionate share of the expected cost of such
investment totals $65 million, which corresponds to its interest in the
Block 7 operations.
The company said it hopes to reach an agreement on the amount required
to be invested during 2007 as capital expenditures during the third week
Pebercan also expects that drilling of three wells by the company will
be completed by mid-January.
The company's shares traded Wednesday at $2.75, unchanged from Friday's
close and just above a 31-month low of $2.71 set in intraday trading on
Friday before the Christmas holiday break.