The liquidity ratio (being current assets divided by current liabilities) of the Group as at 30 June 2007 was approximately 0.3. Since the oil transportation operation in Xinjiang recorded unaudited current liabilities of approximately RMB431.1 million as at June 30, 2007, the Group's liquidity ratio is therefore expected to be substantially improved to approximately 2.8 as a result of the disposal. This represents a very strong short term financial strength for the Group. The Group's gearing ratio would be reduced significantly to approximately zero percent upon completion of the disposal. With a resulting sound and healthy overall financial position, the Group will be ready for further expansion in the upstream business.
Mr Terence Kong, Executive Director, Genesis Energy, said: “The Board has set a target to further reduce the full year loss to a level substantially lower than that reported in the first half. The Board is confident that the target can be achieved by accommodating fresh profit contribution from Utah oil field and extraordinary income from the disposal of Xinjiang Xingmei. The sales agreement with MC Oil in Utah is a milestone for development in Grassy Trails where oil produced is delivered to Chevron’s refinery. We expect the revenue from Grassy Trails to be boosted in 2008 by better than expected production and rocketing crude oil price due to the recent Iraq-Turkey tension.
It is also our priority to maintain a healthy balance sheet position, so as to enable us to tap new investment opportunities in the upstream oil business and credit facilities offered by international financial institutions.”
About Genesis Energy Issued by : Through :
Genesis Energy Holdings Limited (702) is an energy company with focus on oil and gas exploitation and operations. The company invests in and operates oil and gas fields in the United States and is currently engaged in a greenfield development of an oil and gas project in Shaanxi, the PRC. Downstream, the company is engaged in the operation of pipelined gas network and gas refilling stations in Xinjiang, the PRC.
Genesis Energy Holdings Limited
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