Longford Energy Inc V.LFD

Financials out

[coolrunning]

  This does not look good:  

Management?s assessment of the Company, based on its current cash flow forecast and financial model, is that there is

significant doubt as to whether it is a going concern because of the following factors:

a) The minimum work commitments and financial obligations (Note 9) required under the PSC in the first exploration period raises

doubt over the Company?s ability to fund its commitments as they come due.

b) The 2011 exploration work program and budget is estimated to be US$26.1 million (net), which includes the drilling of two

exploration wells, general and administrative costs, security and obligations under the Production Sharing Contract (Note 9).

c) As at December 31, 2010, the Company has a negative working capital position of approximately $24.8 million (December 31,

2009 – positive position of $1.9 million). This negative working capital position includes capacity building payments due to the

KRG (Note 9). The Company has continued to operate under the PSC and in cooperation with the joint venture partners and the

KRG and has not been contacted by the KRG with regards to amounts past due.