The Indonesian-focused Matrix Oil said discussions are being held with a global investment bank to secure a finance package for the remedial work program and planned expansion of production at its Langsa Offshore Technical Assistance Contract Area in North Sumatra.

Matrix said depending on the re-development strategy, it plans to spend $US18-20 million to help bring oil production up to 10,000 barrels per day. The L1 and L2 wells were producing up to 7,000 barrels of oil per day before L1 was shut down for repair work due to a leaking valve. Currently, the L2 well is flowing at a rate of 1,000 bpd.

Matrix said its preferred strategy is to carry out a work over of the L1 well, re-enter and complete the previously drilled H3 discovery well, and drill an infill well (L3) in the L Field. The three well work program would be carried out sequentially using a semi-submersible drilling rig.

The company said it is maintaining regular contact with existing major creditors and financiers and has taken measures to reduce operating costs to current core activities.

"It is envisaged that ultimately agreements will be sought from major creditors and financiers for the rescheduling of liabilities to be paid out of future oil production. This will dependent on the success of the present financing initiative," Matrix said.