27th Aug 2014 13:00
LONDON (Alliance News) - Cadogan Petroleum PLC Wednesday said its losses widened in the first half of 2014, hit by foreign exchange losses and a small decline revenue.
The oil and gas producer with interests in Ukraine said its operations still have not been affected by instability in the country, as it reported a pretax loss of USD3.7 million for the six months to June 30, compared with a USD2.0 million loss a year earlier, hit by USD1.1 million in foreign exchange losses, compared with a USD3.7 million currency gain last year.
Revenue in the period fell to USD1.6 million from USD1.9 million in the first half of 2013, which comprised sales of gas from the Debeslavetska and Cheremkhivska fields, and oil sales from Monastyretska field.
"Significant, further reductions were made to the company's cost base to maintain its financial strength pending results from operations," the company said.
The company said production from its Debeslavetska and Cheremkivska licences continued at a combined rate of about 14 million cubic metres of gas per day, and on Blazhiv field of the Bitlyanska licence about 45 to 50 barrels of oil per day.
At Monastyretska, Cadogan said stimulation was successfully completed in mid-March. That action, combined with the installation of a sucker rod pump in May, resulted in an increase in production from 20 barrels of oil per day to 50 barrels.
Cadogan said coordinates for drilling in Debeslavetska have been determined ahead of drilling, which is expected to commence in November, with a further two wells to be drilled thereafter.
On August 1, the Ukrainian government increased production taxes for the industry as part of its emergency budget legislation, including a tax increase on gas production which will increase the rate by roughly double to 55%, and a tax on oil production which will increase the rate to 45%.
Cadogan reiterated Wednesday that the fiscal scheme changes in Ukraine will not have any material impact on its financial position, operations or work programme.
"The company continues to leverage on its expanding, international relationships and remains responsive to new opportunities that continue to arise inside and outside of Ukraine," it said.
Cadogan Petroleum shares were down 2.4% Wednesday afternoon at 11.35 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Cadogan