8th Apr 2015 07:34
LONDON (Alliance News) - Amerisur Resources PLC Wednesday said its pretax profit fell during 2014 as increased revenue was offset by a significant impairment charge, and said production in the first half of the year will be lower than in 2014, but will steadily increase in the second-half.
The oil and gas company operating in Paraguay and Colombia reported a pretax profit of USD47.5 million, down 37% from the USD75.3 million profit reported a year earlier. Despite revenue rising, profit fell due to a significant USD26.5 million impairment charge and increased costs.
Revenue rose by 18% to USD199.5 million in 2014 from USD169.2 million in 2013, as production increased by 32% to an average of 6,242 barrels of oil per day.
However, in the first quarter of 2015, production has fallen to an average of 4,380 barrels of oil per day. This has been a deliberate move by the company, which has decided to scale back production to conserve its resources amid the current low world oil price.
Amerisur plans to steadily increase production throughout the year once the Ecuador pipeline project is completed to transfer its oil in the second half of the year. By the end of 2015, it said it hopes to be producing around 8,200 barrels of oil per day.
In 2015, capital expenditure is expected to reach around USD45 million on three "low risk" wells, which includes two in the Platanillo block and Lead 1 in Putumayo-12. Amerisur said it has deferred the drilling of the prospective Jaguarete well in Paraguay to 2016, but said it will drill it sooner should the oil price recover.
"Our strategy has remained consistent, to deliver growth through low cost oil production to ensure the free cash flow generated covers the company's capital expenditure and we remain well financed to progress our key work programmes. We have taken several measures to maintain our financial strength and protect shareholder value so that all of our assets remains profitable, despite the low oil price environment and we are well positioned for future growth when the oil price recovers," said Chairman Giles Clarke.
Amerisur shares were trading up 1.8% to 24.43 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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