UPDATE 1-Canada's Niko Resources posts 10th straight quarterly loss
* Says may not be able to meet current liabilities
Cash balance at the end of second quarter slumps
* Second-quarter loss widens, sales volume falls
* Plans to shed non-core assets in India, Trinidad
(Adds details on financing, results, shares)
Nov 15 (Reuters) - Canadian oil and gas producer Niko Resources Ltd posted its 10th straight quarterly loss and said it might not be able to meet its current liabilities and exploration costs.
The company's shares fell 17 percent in early trading on the Toronto Stock Exchange.
Niko, which is trying to restructure debt and refinance loans to fund drilling in India, said it had a working capital deficiency of $110 million as of Sept. 30.
The company's cash and cash equivalents dropped to $55 million as of September end from $98.1 million a year earlier.
Niko said it had not been able to raise funds from usual sources despite "aggressive" efforts and was now looking at "high cost finance package with tight repayment terms."
The company said it secured about $340 million of debt financing.
Niko shares have lost nearly two-thirds of their value this year amid concerns about falling output from the D6 block off India's east coast.
Sales volumes from the block, in which Niko has a 10 percent working interest, almost halved to 54 million cubic feet of gas equivalent per day in the second quarter ended Sept. 30.
The block accounted for almost half of the company's total sales volumes in the quarter, down from nearly 61 percent a year earlier.
India's Reliance Industries Ltd operates the D6 block, in which it holds a 60 percent interest. BP Plc holds the remaining interest.
Uncertainty over the Indian government's decision to double domestic gas prices from April 1, 2014 is also weighing on Niko.
The company is selling assets and had temporarily suspended drilling in Indonesia to focus on its India operations.
Niko agreed in August to sell a 40 percent stake in an offshore exploration block in Madagascar to Austrian oil and gas group OMV and interests in some Indonesian assets for $40 million.
Niko said on Friday it would sell some non-core assets in India and Trinidad.
The company said it had reached an agreement to settle rig-related payments owed to Diamond Offshore Drilling Inc for drilling off Indonesia.
Calgary, Alberta-based Niko also operates in Pakistan, Bangladesh and the Kurdistan region of Iraq.
The company's net loss widened to $149 million in the second quarter from $28.6 million, a year earlier.
Niko shares were trading at $2.17 on Friday morning on the Toronto Stock Exchange.
(Reporting by Garima Goel in Bangalore; Editing by Kirti Pandey)