- Mediterranean Oil & Gas said it may need to seek a sale of assets or the company if funding dries up in the wake of Italy's ban on near-shore drilling.

It reported a loss of €4.7m for the interim period to June, against a €2.6m loss in 2009. Revenue fell to €1.9m from €3.7m.

Proven and provable (2P) oil reserves were doubled to 40m barrels and proven reserves (1P) increased to 12m bbls in February.

The company secured an extension to its Bank of Scotland credit facility of €18m to support further development of the Guendalina Gas field. First gas was forecast for September 2011.

However, chairman Michael Bonte-Friedheim said the Italian decree in June banning exploration and production within five miles of the coast had resulted in uncertainty around development of the Ombrina Mare oil and gas field, the group's principal asset.

The group believed the decree was likely to have a material adverse effect on its ability to access further funding.

'While the group estimates it currently has sufficient working capital until approximately mid-2011, it would need to raise further funds for working capital purposes beyond that time-frame.'

It was reviewing strategic options including a potential divestment of assets or sale of the group.

It expected to receive clarity on Ombrina Mare in the second half and was meanwhile pushing ahead with the environmental approval process.

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