Last month, Cheetah entered into an agreement with Canadian company Invicta Oil & Gas to borrow $US500,000 (K1.33 million) at 8% per annum interest to fund its working capital requirements for the next 12 months, secured by the remaining 10% stake held by Cheetah BC.

Cheetah said in its recently released annual report for 2007 that there was no assurance that the company's actual cash requirements would not exceed the $US500,000 estimate.

In that case Cheetah said it would require additional funds, which if not met will force the company to scale-down or even perhaps cease operations.

"These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares," Cheetah said.

"There is no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable."

Cheetah also said there was no assurance the company would be able to obtain funds to continue operations or if funds became available, that they would be on commercially reasonable terms.

Net cash held by the company, raised by financing, stood at $US1.29 million by the end of last year while its total and current liabilities stood at $US2.47 million in the same period.

Cheetah BC has previously sold a 90% interest of its PNG exploration assets to Invicta, including five PPLs covering around 8.3 million acres.

Invicta has since changed its name to LNG Energy and is listed on the TSX Venture Exchange under the code LNG.