31st Mar 2015 12:51
LONDON (Alliance News) - Caza Oil and Gas Inc Tuesday said its pretax loss in 2014 only slightly narrowed despite revenue almost trebling in the period as higher costs and a loss on the disposal of its Wharton county asset offset the increase.
The the oil and gas acquisition, exploration, development and production company operating in the US reported a slightly narrower pretax loss for the year ended December 31, of USD7.1 million from a USD8.6 million loss in 2013.
This is despite revenue for the year almost trebling to USD22.9 million from USD8.3 million, which was offset by higher financing, depletion and depreciation and a significant loss on the disposal of an asset.
Revenue rose as average production volumes increased to 923 barrels of oil equivalent per day compared to only 338 barrels per day in 2013.
Financing costs rose to USD6.7 million from USD2.5 million, mainly caused by a rise in interest expense, whilst depletion and depreciation against its petroleum and gas assets increased to USD7.5 million from USD3.4 million a year earlier.
The company also recorded a USD8.7 million loss on its disposal of its assets in the Wharton county, which it sold for a total cash consideration of USD1.6 million, it said.
These were all partially offset by small falls in administrative expenses, impairments on exploration and by a significant USD6.2 million gain from its hedging contracts.
Through to 2017, Caza said it has hedged around 80% of its production with a current mark-to-market value of USD5.9 million.
"We recognize that the current low oil price environment is not ideal, but we are well positioned, in what we believe to be one of the best plays in North America, with very good assets, a sound hedging strategy and strong current cashflow," said Chief Executive Michael Ford.
At the end of December, Caza had a cash balance of USD5.2 million.
"We made significant progress in 2014. Our Bone Spring drilling program delivered value to the company and our shareholders and resulted in significant growth to cashflow, revenue and reserve values over the course of the year. Unfortunately, the decline in global oil prices altered that growth and has impeded our progress for the time being, but management is actively reviewing all options to position Caza for imminent growth once drilling costs appropriately adjust and commodity prices recover," said Ford.
Caza shares were down 12.2% to 4.50 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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