Frontier Resources shares plunge on funding concerns

10th Sep 2014 10:25

Frontier Resources International, an oil and gas explorer, saw shares tumble on Wednesday after saying in its half-year report that future funding remains uncertain.The company, which is yet to generate any revenues from its assets in Oman, Zambia and Namibia, managed to reduce its loss before tax to $442m during the first half compared to $557m same time last year. Loss per share also decreased to 0.4c from last year’s 0.71c.Cash and equivalents rose to $144,000 against $110,000 in the previous half-year.Frontier raised $0.91m (net of expenses) during the period through a placing but said these proceeds will not provide enough working capital to fund its planned activities for the next 12 months.Further exploration activitiy general working capital is hoped to be funded by a farm-out of one or more of its interests and the board said it is confident of getting this funding.However, chairman Ric Piper said: "There can be no guarantee or certainty that the funds required will become available within the foreseeable future.“If future funding was not to become available in an appropriate timescale, the directors would need to consider alternative strategies and an impairment review may be required in respect of the carrying value of the group's assets,” he said.The chairman said "material uncertainties therefore exit" and that the second half of the year will be "critically important to Frontier's development".The group’s shares plunged 18.03% to 1.25p on Wednesday at 10:52.