Argos Resources Swings To Profit In 2017 Due To Foreign Exchange Gain

16th Mar 2018 12:05

LONDON (Alliance News) - Argos Resources Ltd on Friday reported a swing to a profit for 2017 due to cost cutting and the positive impact of foreign exchange rates, as well as royalty income received under a participation agreement.

The firm reported an attributable profit of USD118,000 for 2017 from a loss of USD16,000 last year due to foreign exchange gains of USD66,000 from a USD95,000 loss the year before. Other income totaled USD380,000 in 2017, from USD505,000 in 2016.

Administrative expenses fell to USD329,000 from USD427,000 the year before, reflecting "the full effects" of management efforts to cut costs in 2016.

The company said a participation agreement between Noble Energy Falklands Ltd, Edison International SpA and Argos Resources continues to be in effect.

The participation agreement confirms the company's entitlement to a 5% royalty interest in licence PL001 in the North Falkland Basin. The company said that a three year extension of the licence was approved in 2016, which extends the current second phase of the licence to November 2019.

The oil and gas exploration company said it will receive future cash payments totalling USD405,000 per annum from Noble and Edison, which will be sufficient to meet its ongoing running costs until first oil production.

"There is a risk that Noble and Edison withdraw from the agreement. In such circumstances the Licence would revert back to Argos, subject to Government approval. Given that Noble and Edison have been granted an extension to the Licence, which now runs until November 2019, withdrawal is considered unlikely," the company said in a statement.

The company's cash reserves were USD758,000 as at December 31, up from USD701,000 the same date a year prior.

Shares in Argos Resources were down 6.3% at 3.75 pence on Friday.

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