24th May 2018 13:28
LONDON (Alliance News) - Baron Oil PLC on Thursday reported dramatically widened loss for 2017 as a result of the termination of a contract with its Peruvian partner Union Oil & Gas Group.
The Latin America focused company reported a pretax loss of GBP2.1 million, multiplied from a GBP175,000 loss posted the prior year.
The company booked a GBP508,000 loss on exchange versus GBP1.1 million profit the prior year.
Meanwhile, in Peru, the decision to relinquish block Z34 led to a write off of GBP1.8 million. This reflects primarily the write off of the USD2.0 million receivable from Union Oil, the company said, following Union Oil's failure to meet its obligation under a farm-out agreement.
Baron Oil has not generated any revenue since July 2015, following the cessation of production from the Nancy-Burdine-Maxine fields in Colombia.
"During 2017 we were finally able to extract the company from the problems created by our partnership with Union Oil & Gas Group in Peru," said Chairman & Chief Executive Malcolm Butler. "In the meantime, we continue to seek a partner for Peru block XXI and hope we will be able to drill the El Barco prospect in due course."
Operations at Block XXI in Peru were suspended in February last year due to floods, but in the meantime Baron Oil said planning for the El Barco-3X well continued. However, due to the cancellation of the contract with Union Oil, Baron Oil no longer has the funds to drill without bringing in a another partner.
The stock was trading 9.2% higher at 0.52 pence per share on Thursday.
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