Princess Petroleum and it’s broke back concession partner

While the tourism sector may be on the road to recovery, tonight it has come to light that one of the companies that has received an offshore exploration concession does not have the required expertise in the oil industry nor the financial capability to follow through on its obligations. Princess Petroleum Limited received its license to explore one million eight hundred thousand acres offshore and two hundred thousand acres onshore. The company is part of the Princess Group International, which owns the Princess Hotel and Casino on Barrack Road. The concession costs hundreds of thousands of dollars per year, and recently Princess partnered with Treaty Energy Corporation of Houston, Texas.  It appears that Treaty Energy has some experience in drilling; but is said to be in deep financial crisis.  Treaty Energy, also known as TECO, has filed a statement of its accounts with the United States Securities Exchange Commission. A quick perusal of the numbers paint a grim financial picture. The account statement says “Currently, we are not able to maintain our existing operations through the existing cash balances and internally generated cash flows from sales of oil production. Additionally, we have lost the only oil and gas lease providing the Company cash flows from operations.  Moreover, we have determined that our existing capital structure is not adequate to fund our planned growth. There can be no assurance that we will be successful in procuring the financing we are seeking.  There can be no assurance that operations and other capital resources will provide cash in sufficient amounts to maintain planned or future levels of capital expenditures.” Even though the admission is startling, Treaty’s Website says it is targeting ten thousand acres off the shore of southern Belize to begin exploration no later than July first 2010.