28th Aug 2015 12:44
LONDON (Alliance News) - Cadogan Petroleum PLC said Friday posted a widened pretax loss for its first half as it continued to work on moving towards cash neutrality, in what it said had not been an easy reporting period for the oil and gas industry.
Oil and gas exploration, development and production company focused on Ukraine reported a pretax loss of USD4.5 million for the half year to end-June, widened from a pretax loss of USD3.7 million, as a rise in revenue to USD40.6 million from USD1.6 million was offset by a rise in cost of sales, and a USD4.2 share of losses in joint ventures.
Cadogan highlighted the challenging environment in Ukraine, where the "negative impact of persistent low prices has been compounded" by "the devaluation of the currency and the extension into 2015 of the harsh fiscal regime introduced in 2014 as a temporary measure."
After the end of the reporting period the government announced that the harsher regime will be abolished, however, the company noted that new legislation may not apply to joint ventures and thus its gas production from Debeslavetske and Cheremkhivske may still be effected.
The company said that its trading activity has grown during the first half, bringing its volumes traded to almost twice what it traded in 2014.
"The board remains confident that the democratic process in Ukraine will deliver increased transparency and that the current economic difficulties will be overcome with the support of international financial institutions. The harsher, temporary fiscal terms introduced last year are expected to be withdrawn and this will contribute to restoring the conditions for investing in the exploitation of the marginal and technically challenging fields of Ukraine," the company said in a statement.
"At the same time the crisis of the oil and gas industry triggered by the persistent low oil prices is creating opportunities for companies like Cadogan which have the cash, the experience and the know-how to operate in an efficient manner," Cadogan added.
Shares in Cadogan were up 1.2% at 10.25 pence Friday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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