Argos Resources Ltd intends to apply for an extension to its licence to operate in the North Falkland Basin.
The Falkland Islands-based company is also in talks with parties interested in its drilling licence programme and looking to raise further finance.
The news comes as it posted an increase in half year losses compared with the same period in 2019.
Argos’s results posted last Friday (18 September) showed $192,000 losses for the first half of 2020 compared with a loss of $176,000 for the same period in 2019.
The company’s reserves stood at $560,000 at the end of June 2020 compared with 2019 year-end reserves of $768,000.
Foreign exchange losses of $45,000 soared from $3,000 from H1 in 2019, but administrative expenses were $148,000 compared with $175,000 (H1: 2019).
Net assets of $29.3 million reflect a decrease of $192 thousand since December 2019 as a result of the loss for the period.
Chairman Ian Thompson said that the licence extension would give Argos time to recover from the fall in oil prices, economic downturn and the Covid-19 pandemic.
Argos’s current second phase of its licence expires in May 2021.
“The company continues to seek partners to participate in drilling on its licence and is currently engaged with a number of counterparties who have expressed interest, ” added Mr Thompson.
“Given the current challenging environment the company believes it may be some time before any expressions of interest are translated into commitments.
“The industry slowdown has meant that some costs which were expected to be incurred in the current year have been delayed and the group has sufficient cash resources to continue for a period of at least 12 months from the date these financial statements were signed.
“In order to continue as a going concern beyond that the company will need to raise further finance.”
Argos Resources was established in 1995 and awarded Licence PL001 in 1996.
The company participated in drilling two exploration wells in 1998, both of which recorded oil shows but neither of which were commercial.
A 3D seismic revealed the prospectivity of the basin, leading to the discovery of the Sea Lion oil field in 2010, the Zebedee oil discovery in 2015 and the Isobel oil discovery in 2016.
Argos stated that there were 52 oil prospects, 3.1 billion barrels of prospective recoverable resource, with upside of 10.4 billion barrels
A total of 40 additional leads have been identified.