Petroneft to take advantage of weak market with acquisitions or tie-ups
Irish oil and gas firm Petroneft is looking at acquisitions or business tie-ups to help it take advantage of the weak marketplace.
The exploration company, which largely operates in Russia, grew its production by 39pc in the first half of the year as it dealt with widening losses.
Revenue at the company increased by $142,000 (€126,455) to $1.36m (€1.21m) while its cost of sales crept up by $29,000 to $1.24m.
Despite the increased revenue Petroneft posted a loss for the period of $2.3m, up by nearly $900,000 on the same period last year.
The main contributors to the increased losses include the company's share of losses in two of its joint ventures, namely WorldAce Investments and Russian BD Holdings.
Its share in WorldAce cost Petroneft $2.4m while its stake in Russian BD set the firm business back $173,000.
Petroneft chairman David Golder said the year has been very busy for the firm.
"Given that market conditions remain challenging with little sign of improvement in oil prices in the near term, our focus continues to be on growing production, managing costs and positioning the company for any improvement in market conditions," Mr Golder said.
"We are also investigating opportunities to benefit from current conditions by growing the company through acquisitions or business combinations focussed on producing assets in Russia," he said.
During the six-month period the firm also concluded what was a long-running battle over the composition of the board. The dispute was between Petroneft and its largest shareholder Natlata Partners.
Both parties came to a resolution in 11th-hour talks, which saw Natlata withdraw resolutions due to be put forward at an emergency general meeting in April. As a result Natlata boss Maxim Korobov was appointed a non-executive director alongside Anthony Sacca and David Sturt.
Davy analyst Job Langbroek said the results reflect the reality of very low oil prices.
"A strong joint venture partner and improving production helps but for now the focus remains on cost reductions and efficiency. The opportunity lies in having a low cost base when prices recover and the ability to transact in Russia at the bottom of the price cycle," the Davy analyst said.
Shares in the company have suffered over the last five years with the oil market playing havoc with its price. Petroneft shares can now be bought for as little as 2.4p, which contrasts from 28.8p in 2011.