Oil collapse sees sales fall at Irish firms
Two Irish exploration companies, Circle Oil and PetroNeft, have seen sharp drops in sales on the back of falling prices for oil internationally.
Revenues more than halved at Limerick-based Circle in the first six months of the year compared to the same period in 2014, dropping from $47.8m to $22.3m. Operating profit came to $5.4m compared to $12.3m while additional costs such as higher administrative costs and exploration write-offs led to a drop in net profit from $9.4m to $2.8m.
The company, which is mainly focused on Morocco and Egypt, said the dramatic decrease in its revenue was primarily due to "the impact of lower oil prices and reduced Egypt production".
In Morocco, the company's operations produced an average of 6.2m cubic feet of gas per day, while in Egypt production averaged 9,648 barrels of oil equivalent per day (bopd).
Net cash at the end of the period was $17.1m with net debt standing at $64.4m.
Analysts were reasonably upbeat about the results, with Job Langbroek of Davy Stockbrokers saying: "We continue to think that its Moroccan and Egyptian assets provide an ideal platform to build out a cash flow-focused exploration and production group with a North Africa focus. Better oil markets and sentiment generally will highlight Circle's strengths."
Meanwhile, Dublin-based PetroNeft saw a plunge in its sales in the first half of the year, with revenue diving from $17.5m to $1.2m as the slump in oil prices took its toll.
However, the Russia-focused firm managed to almost halve its losses for the period from $2.7m to $1.4m, mainly due to a reduction in costs such as administration expenses.
The company's production stemmed from a licence in the Tomsk Oblast region in Russia, in which it owns a 50pc stake.
Gross production at the licence averaged 1,744 bopd, a 19pc decrease compared to the same period in 2014, although the project is now performing better and the current rate of gross production is running at 2,700 bopd.
The firm sold just under 330,000 barrels of oil in the period at an average price of just under $30 compared to selling almost 400,000 barrels during the same period last year at an average price of $44.79.
Chairman David Golder said: "Given that market conditions remain challenging with little sign of improvement in oil prices in the near term, our focus is on growing production, managing costs and positioning the company for any improvement in the market conditions."