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Lochard Energy Group poised for eventful 2012

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Lochard Energy Group PLC (LON:LHD, ASX:LHD) reported results for a transformational full year, which saw the group sell its drilling fluids business and change its name from Rheochem to focus on its upstream oil and gas assets in the UK North Sea.

Lochard's 100 percent owned subsidiary Zeus Petroleum was awarded a 90 percent interest in nine new offshore blocks in the 26th bidding round, which gave the group interests in 11 North Sea blocks.

The company has a 10 percent interest in the Athena development, which is nearing completion, discoveries on blocks 14/26b (Thunderball), 16/8c (Moby) and 3/10c, and a large exploration upside over the remaining blocks.

First oil from Athena is expected in the fourth quarter 2011.  Initial production rates net to Zeus are estimated at 2,200 barrels of oil per day.

The operating loss for the year ended June 31 2011 widened slightly to A$4.3 million from A$3.7 million.

The sale of the drilling fluids business generated a net profit of A$11.6 million, and cash and cash equivalents at the end of the period under review stood at A$12.55 million, compared with A$5.8 million a year earlier.

Chief executive Haydn Gardner said:  "The Athena development is nearing completion with first oil expected before the end of the calendar year. The expected production revenue from this field will provide funding for Lochard's share of planned exploration expenditure on the other blocks.

“In addition, the proceeds from the sale of the fluids business will support further exploration activities. Lochard will open a data room for the Thunderball discovery in September with a view to attracting farm in partners to drill the Thunderball and Moby discoveries in H2 2012."

Quick facts: Lochard Energy Group

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AIM:LHD
Market: AIM
Market Cap: -
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