Petrel chair asks shareholders to sit tight as losses mount
Petrel Resources Chairman John Teeling has urged shareholders to hold onto their stakes in the exploration firm as it was revealed yesterday that losses increased to almost €2.5m last year.
Mr Teeling also revealed that the firm plans to bid for "one or two" oil exploration blocks in the Government's Atlantic Margin Licensing Round.
The company has a track record in the area, having been awarded an exploration licence for the Irish Atlantic's Porcupine Basin last year.
The Dublin-based oil and gas exploration firm, which is active in offshore Ireland, Iraq and Ghana, yesterday announced that its loss before taxes last year almost hit €3m. This compared to a before-tax loss of just €526,783 the year before.
The sharp increase was mainly due to a significant €2.5m impairment charge booked against the company's assets in Iraq, the value of which the firm has decided to reduce to nil due to the political instability in the country.
Losses per share also rose sharply, jumping from 0.63 cent to 2.97 cent. The AIM-listed company's stock price fell sharply on the back of the news, dropping by more than 6pc in London yesterday to a low of 2.8 pence. The firm's share value has been decimated in recent years, dropping by more than 90pc since 2011 as losses have mounted. The company has faced delays in projects in Iraq and Ghana due to political difficulties in both countries.
The firm has also faced delays in Ireland and does not expect to start drilling at its licence in the Porcupine Basin before 2017 at the earliest.
Speaking to the Irish Independent, Mr Teeling said the company's shares are undervalued and urged investors to sit tight.
"The fact that there is no news is what's killing the shareholders. They're looking for progress in the next six months," he said. "It is very hard to get interest in the oil and mining sector at the moment, investment in the AIM market is non-existent no matter what you do.
"In a situation like this you just have to batten down the hatches and hold on, shareholders who hold on will do well."
He added that despite the losses suffered the company still has some cash available and will look to bid for new ventures in the Government's Atlantic Margin Licensing Round, which is set to close in September.
We will be an applicant in the bidding round in the Atlantic, we will be looking for one or two [exploration] blocks in that."