28th Sep 2015 06:59
LONDON (Alliance News) - Amerisur Resources PLC on Monday said it swung to a pretax loss in the first half of 2015 from the substantial profit made a year earlier as production came in lower than expected and because of lower oil prices.
The South American focused oil and gas company reported a USD5.8 million pretax loss in the first six months of 2015, swinging from the USD50.8 million profit a year earlier as revenue plummeted to only USD40.3 million from USD114.1 million.
The severe drop in revenue resulted in a gross profit of USD1.6 million compared to USD59.3 million a year ago. It resulted from lower oil prices and lower-than-anticipated production of 4,524 barrels of oil per day, achieving a price of USD49 per barrel.
Amerisur said it is aiming to have production reach an exit rate of 5,000 barrels per day by the end of 2015 and to reduce its operating costs per barrel from the current USD27 per barrel to USD16.
"We changed the company's operational strategy at the beginning of the year in the context of the low oil price environment with the aim of protecting the company's valuable reserve base and ensuring that operating cashflow exceeded exploration capital expenditure to protect the balance sheet," said Chairman Giles Clarke.
"In the first half we responded to the lower oil price environment swiftly, decisively and responsibly. The OBA interconnector pipeline system is now under construction, and we are delighted with the support shown in both Ecuador and Colombia towards the project," said Clarke.
"We expect the pipeline to be in operation at the end of the fourth quarter of 2015. Once open and flowing, the interconnector opens numerous possibilities for our shareholders. We have also taken the opportunity in this low oil price environment to broaden the company's asset base at low entry cost," he added.
By Joshua Warner; [email protected]; @JoshAlliance
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