Oil explorer Petroneft cuts losses
PETRONEFT has scaled back its losses, but 2012 was still "a difficult year".
Accounts show the Irish oil exploration company made a pre-tax loss of $2.8m (€2.1m) last year, a sizeable reduction on the $16.4m it lost in 2011. Sales reached $35m, up from $29m.
Chairman David Gelder called it "a difficult year" in which the firm could not compensate for the disappointing results at its Lineynoye site at Kaliningrad in Russia.
Production and cash flows were lower than expected, which caused issues with the company's loans from Macquarie. This in turn impeded its ability to fund drilling work quickly enough to offset the production shortfall.
Production of oil reached 2,204 barrels per day, up from to 2,049 in 2011.
Mr Gelder said shareholders "should not lose sight" and highlighted that the company is producing from less that 1pc of its reserve based.
He said the substantial investment in infrastructure made in recent years leaves Petroneft well placed to deliver "significant and profitable growth" once the necessary funding is available.
The company secured a new $15m three-year loan agreement with Russian company Arawak last year and brought its Arbuzovskoye oilfield into year-round production.
Work on a water injection well began at Arbuzovskoye in April, though the benefit will take several months to emerge.
Goodbody stockbrokers said yesterday that increasing production levels at Arbuzovskoye were key to generating enough cash to reduce the company's debt, which stood at $36.5m in 2012.
The firm said its oil and gas properties are now worth $105m, up from $93m. It invested $18m towards new properties in 2012, compared with $33m in 2011. Its head count now stands at 170 staff.
Petroneft's share price rose 14pc in late afternoon trading yesterday to 4c.