Loyz Energy

Loyz Energy: (The Edge) Grp has clinched an onshore drilling deal in US that could turn the loss-making co. ard, although grp may seek more cash from investors over the short-term. Under agreement, Loyx will use its technical expertise to pinpoint exact locations at which oil wells will be drilled for production and aims to commence drilling by start of nxt yr, with costs estimated to be US$40m and equally distributed btwn Loyz and Fram. Lease will enable grp to lock in rev immediately frm selling the oil and help swing it back to profitability. Grp expects to produce 80 to 100 barrels of oil per day for the nxt 5-10 yrs and estimates co. could earn up to US$50 in profit for each barrel of oil sold. For the project, Loyz will provide 2 onshore drilling rigs and is currently negotiating the acquisition of the rigs frm the second hand mkt, with each rig estimated to cost btwn US$10m-US$20m. Loyz admits it may have to carry out more fund-raising programs as local banks are more unwilling to provide debt financing when it comes to upstream exploration activities. All in, Loyz owns a total of 6 concessions including additional onshore concessions in the later stages of development in India. Note that strategy is to own a balanced portfolio of diff stages of development, both on-shore for the cash flow and offshore where striking oil could be a big game changer.