23rd Sep 2014 10:20
LONDON (Alliance News) - Faroe Petroleum PLC Tuesday said it swung to a first-half loss, hit by a sharp fall in revenue on the back of a shut-in period at its Njord and Hyme fields in the Norwegian Sea, as well as a hefty exploration write-off.
The oil and gas exploration and development company focused on Norway, the UK and the Atlantic Margin, said it swung to a huge pretax loss of GBP20.1 million in the six months to June 30, from a pretax profit of GBP17.6 million in the first-half of 2013, hit by exploration write-offs of GBP16.7 million and lower revenue and production.
The company posted a net loss of GBP3.7 million for the period, boosted by a GBP16.4 million tax credit.
Revenue in the period fell to GBP53.5 million, down from GBP89.0 million a year earlier, due to a shut-in period earlier in the year at its 7.5% owned Njord and Hyme fields in the Norwegian Sea, in order to carry out structural reinforcement work.
"As anticipated, the Njord and Hyme temporary shut-in reduced turnover and profits for the first half but with these fields having been brought back on production in July, Faroe's production levels are now higher than ever before," said Chief Executive Graham Stewart in a statement.
Faroe Petroleum said average economic production in the first-half was 7,592 barrels of oil equivalent per day, compared with 7,890 barrels last year.
The company said its production guidance for 2014 of between 7,000 barrels and 10,000 barrels of oil equivalent per day, have been boosted by the acquisition of Schooner and Ketch.
The company acquired 53.1% and 60%, respectively, of operated Schooner and Ketch gas and condensate assets in the UK southern North Sea, earlier in the year.
"The Schooner and Ketch operated production acquisition considerably boosts and diversifies our oil and gas cash flow generation," said Stewart.
Faroe Petroleum said its 2015 and 2016 exploration and appraisal programme is fully funded from its existing resources, with five exploration wells scheduled in Norway in 2015, including two follow-up wells on the Pil oil discovery.
The company said its capital expenditure for exploration, development and production for 2014 is forecast to be around GBP130 million, amounting to around GBP60 million after its Norwegian tax rebate.
"We are well positioned and funded to achieve significant near term growth through exploration drilling, field investments and potential asset acquisition," the company said in a statement.
Faroe Petroleum shares were trading 0.2% higher Tuesday late morning, at 110.00 pence.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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