Transeuro Energy (CVE:TSU) remains in discussions with third parties over development of its Beaver River gas assets in Canada.
A decline in production from Beaver River meant first quarter revenues declined to C$377,00 in the three months to March compared to C$501,000 a year earlier. Net losses for the period were C$2.1mln (C$1.4mln).
Gas production was significantly lower due to the natural decline of the wells and minor reductions for operational issues during the winter period.
But the company says gas prices have picked up to a range of US$3.3/mcf and after a recent cost saving programme Transeuro believes if gas production can be increased to 10 mmcf/d, its unit operating costs should reduce down to the range of $1.2-1.4/mcf.
This is a sufficient margin to justify further investment in the asset, it said, and it repeated its hopes the third party discussions over Beaver River will make further progress through the summer.
Transeuro needs Beaver River's performance to pick up to boost its financial position and also help with the funding of investment commitments on its existing and possible future licences in Ukraine.
The company recently agreed the sale of a drilling rig it had in Armenia, a deal it expects to close in early June. At end March, thetre was negative working capital of C$1.68 mln.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.