CANADIAN oil and gas explorer Esrey Energy will fund portions of a creditor’s share in work programs the two groups are involved in as part of a settlement deal.

The deal will cover almost US$3.4 million in debts owed by Esrey subsidiary Kaynes Capital to what the company called an “arm’s length creditor” under matured non-revolving credit facilities.

Aside from funding the work programs, Esrey has pledged that any new oil and gas licences acquired in Papua New Guinea for the next 72 months will be bought through subsidiary Telemu No. 18, in which the Creditor has a 15.75 per cent interest.

The news came as Esrey announced it would withdraw from its investments in Poland after its unconventional reservoirs failed to yield commercial results.

Esrey transferred its 42.96% stake in Saponis Investments to BNK Petroleum Poland Holdings, paid a final cash call of US$100,000 and assigned and forgave its loans receivable from Saponis in exchange for BNK assuming the future obligations of Saponis.

Esrey chief executive David Nelson said the company would now move forward and focus on its core conventional assets in Papua New Guinea.

“With a clean balance sheet, our near-term focus will be on the upcoming well to be drilled on our PPL 486 license in PNG and our ongoing evaluation of additional opportunities,” he said.

Esrey holds a 16.85% net interest in PPL 486, which will be 80% owned by Heritage Oil, subject to the fulfilment of work commitments under a farm-in agreement.