London-listed player LGO Energy has re-started payments to its directors after a prolonged period when salaries were suspended due to low oil prices.

LGO said on Wednesday that the company bosses will now reap the benefits of the recent loan re-financing and equity placement, which will also support plans to return to drilling activities in Trinidad.

Salaries to directors have been suspended over a large part of the last 15 months. However, with the re-financing now in place, the company has resumed payment of salaries on an ongoing basis.

“A gross cost of £397,000 ($490,000) has been accrued in the company's books for these unpaid directors' fees, excluding the company's chairman, since September 2015,” LGO said.

Payments will now be made in the form of company shares.

“It is estimated that those directors involved will, in aggregate, be issued with approximately 120 million shares, of which those converted and held by Neil Ritson, the company's chief, will be approximately 75 million shares (approximately 1% of the issued share capital),” according to LGO.

Ritson currently holds 17.5 million shares.

"Following a prolonged period when the salaries of directors were suspended to preserve cash while the company was in default on its senior debt, it is now important that the company resolves this last material creditor group and also fulfils its contractual commitment to its directors,” non-executive chairman Steve Horton said.

“The agreed arrangements will further align the key directors to the company and will continue to help preserve cash in order that the company can invest capital in its production drilling operations in Trinidad," Horton said.

The recent loan re-financing and equity placement have positioned the company for an early return to drilling at its Goudron field, where LGO plans to kick off “as soon as practical in 2017” a drilling programme targeting the ubiquitous Mayaro Sandstone oil pay interval.

LGO's Goudron subsidiary, Goudron E&P, also expects to submit the formal application for a waterflood enhanced oil recovery (EOR) project to the competent authorities in Trinidad during early 2017 with a view to commencing the initial phase of waterflood in the C-sands at Goudron in late 2017, it said .

"After a difficult period with low oil prices and a senior debt facility that was difficult to service effectively from field operations, which themselves were constrained by limited available funds, we can now look forward to the imminent return to development drilling and the deployment of capital to increase production at the company's flagship Goudron field,” Ritson said.

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LGO to re-start directors pay