Petroneft's loss grows to $7.1m but firm expands
PETRONEFT Resources, a Dublin-based oil producer with fields in Siberia, said its net loss widened to $7.1m in 2010, up from $6.5m as it began to produce oil from a field the size of Munster.
"The main reason for the increase in losses relates to an increase in overheads, partly due to the addition of new staff at our Tomsk operations during the year, and the depreciation charge for non-current assets, constructed during the year," the company said in a statement.
Petroneft, which was one of the best-performing shares on the Dublin stock exchange last year, has started extracting oil from its existing oil fields in one of the world's least hospitable areas. The company has completed a 60km pipeline to get the oil out of the area.
"2010 was a transformational year, which saw PetroNeft evolve from an exploration company to one with both exploration and production," said its chief executive Dennis Francis.
He added: "Our proved and probable oil reserves grew by 37pc, with the addition of two new oil fields to our portfolio."
After drilling nine new production wells last year as part of a $42m programme, the company expects to add 17 new production wells this year by spending a further $53m.
Five well-exploration programme targeting 120m barrels of reserves is already under way.
The company maintained it present guidance for production after a recent cut.
"Petroneft sees 2010 as a transformational year, and we find it hard to disagree with this," Davy Stockbrokers said in a note to clients.
"Pipeline and infrastructure construction was followed by development drilling and start-up of production."
The broker added that it was maintaining its 'outperform' rating on Petroneft.