21st Mar 2016 12:29
LONDON (Alliance News) - Falkland Islands-based oil and gas company Argos Resources Ltd on Monday reported a narrowed net loss for 2015, the result of lower administrative expenses, and said it will continue to receive payments sufficient to cover its running costs.
Argos Resources said its net loss was USD1.2 million for the year ended December 31, from USD1.3 million in 2014, after administrative expenses fell slightly to USD1.1 million from USD1.2 million.
Argos Resources said it will receive future cash payments from Noble Energy Falklands Ltd and Edison International SPA, totalling GBP300,000 per annum, which will be sufficient to meet its running costs until first oil production.
This comes after Noble Energy, in which Argos Resources has a 5% overriding royalty interest, declared force majeure after terminating its contract with Ocean Rig UDW in February.
Noble had been planning to drill an exploration well on Licence PL001, which was due to commence shortly using the Eirik Raude drilling rig in the North Falkland Basin. However, due to operational issues with the rig, Noble has cancelled its contract.
At the time, Argos Resources said Noble intends to apply to the Falkland Islands government for an extension to the current phase of the licence, which requires the drilling of a commitment well in order to move to the next phase.
"We were, of course, very disappointed to have been so close to drilling commencing on our licence, only to suffer the delay which ensued from the cancellation of the rig contract,." said Argos Resources Chairman Ian Thomson.
Our overriding royalty interest in the licence will continue into any extension period agreed and our future running costs are covered, so we remain well positioned. Both Noble and the company continue to be very positive about the exploration potential of the licence area," Thomson added.
Shares in Argos Resources were down 14% at 3.65 pence on Monday.
By Hannah Boland; [email protected]; @Hannaheboland
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