17th Jun 2015 07:55
LONDON (Alliance News) - Baron Oil PLC Wednesday reported a wider pretax loss in 2014 as costs outstripped revenue and it booked numerous impairments, but said it is expecting "positive results" in 2015 after a "challenging year".
The Latin American focused company reported a GBP3.3 million pretax loss in 2014, widening from a GBP3.0 million loss in 2013.
Revenue rose to GBP2.8 million from GBP2.2 million, but cost of sales came in at GBP3.7 million in 2014 from GBP2.4 million a year earlier. "Although this is a significant increase over the preceding year we suffered a number of major disruptions to our production volumes in 2013, and the 2014 turnover actually reflects the significant impact of falling oil prices relative to the cost of production in the Colombian producing wells," the company said.
Property, plant and equipment impairments related to its assets in Colombia totalled GBP1.4 million, versus none the year before, goodwill impairments came in at GBP922,000, up from GBP526,000 previously, and impairments related to receivables were GBP773,000, also versus none the year before.
The impairments were partially offset by administrative expenses falling to GBP1.4 million from GBP2 million.
"With the current outlook for Colombia, it has been necessary to continue with the impairment of the carrying value of our assets; we now have a balance sheet that consists largely of current assets and a clear value for our remaining exploration assets. The board continues to believe that positive results in both net income and cash flow in 2015 and beyond can be anticipated," said Baron.
The company has begun to look for new opportunities outside of Peru, where it has exploration assets, and Colombia. The "ongoing bureaucratic delays in Peru plus the difficult operating conditions in Colombia have necessitated a review" of where the company spends its remaining capital.
Baron Oil shares tumbled 11% to 0.890 pence per share on Wednesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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