Deep pockets needed for shale investors

Australian shale oil producer Southern Pacific Petroleum (SPP) has been forced to halt trading in its shares as the embattled company urgently seeks a fresh injection of capital to prop up its controversial Gladstone operation.
Deep pockets needed for shale investors Deep pockets needed for shale investors Deep pockets needed for shale investors Deep pockets needed for shale investors Deep pockets needed for shale investors

SPP has told the stock exchange that it is seeking $10 million to boost working capital for the Stuart Project in Gladstone, Queensland, which has already drawn more than $300 million for the development of a demonstration plant.

In May this year the company announced a $52 million funding package from US energy investor Sandefer Capital Partners, which it had hoped would allow the demonstration plant to be turned into a commercial operation. SPP said its available funds have now declined from $18.3 million at the end of September to $14.5 million at the end of October.

Despite its financial woes the company continued to set an oil production target from the plant of 600,000 bbl for the full year 2003, and targeting an output of 1.2 million bbl by 2005.

Adding to SPP's woes has been the constant criticism from environmentalist groups who claim the plant is among the worst industrial polluters in the country.

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