1st Jun 2015 07:28
LONDON (Alliance News) - Circle Oil PLC Monday said it swung to a substantial pretax loss in 2014 after it booked impairments and write-offs related to its operations in Oman and Egypt and the fall in oil prices.
The company reported a pretax loss of USD53.9 million in 2014, compared with a USD28.9 million profit in 2013, after revenue fell to USD84.6 million from USD93.3 million and it booked exploration write-offs totalling USD57.4 million.
The loss was also caused by a USD706,000 foreign exchange loss from a USD118,000 gain, a USD13.9 million impairment, a USD975,000 share option expense and higher administrative costs of USD5.9 million from USD4.7 million.
The USD57.4 million write off relates to the company's decision to relinquish two permits in Oman whilst the impairment was for the NW Gemsa permit in Egypt due to the fall in oil prices.
Revenue fell due to the fall in oil prices, alongside a small decline in production from Egypt. Circle said its cash balance has been impacted by the oil price and due to cost overruns on the Mahdia and Block 49 permits.
The average gross oil price in 2014 was USD94.80 a barrel, compared with USD104.40 a barrel in 2013 whilst the average gas price experienced a small drop to USD10.12 per million standard cubic feet from USD10.34.
At the end of 2014, Circle reported an available cash balance of USD34.5 million.
Circle said it will review the operator's field management in Egypt ahead of more infill drilling in 2015 whilst continuing with the drilling programme on the Sebou and Lalla Mimouna permits in Morocco. In Tunisia, Circle awaits government approval to proceed to the next exploration phase on the Mahdia permit and will re-commence its farm-out efforts, it said.
The drilling of Sedouikech well in the Ras Marmour permit in Tunisia is "likely to be undertaken", but the final decision will be taken in light of an overall review of Circle's capital expenditure commitments.
Circle said it expects to increase its gas reserves in Morocco in 2015 whilst sustaining oil production in Egypt.
Circle shares were down 5.6% to 12.50 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Circle Oil Plc