25th Mar 2014 09:45
LONDON (Alliance News) - Faroe Petroleum PLC Tuesday said it swung to a pretax profit in its full year 2013 as lower costs and expenses offset a fall in revenue and production.
The oil and gas company, with operations in Norway, the Atlantic margin and the North Sea, posted a pretax profit of GBP10.0 million compared with a pretax loss of GBP29.0 million the previous year despite a 19% fall in revenue to GBP129.4 million from GBP158.8 million in 2012 due to major drops in production.
Faroe Petroleum said it had managed to cut its cost of sales by 21% to GBP76.5 million from GBP97.0 million the previous year and added that it also cut its exploration expenses 72% to GBP22.2 million from GBP79.7 million in 2012, as the group was hit by significant exploration expenditure impairments the previous year that didn't recur.
The company said in February that it had fallen short of its forecast production for 2013 due to necessary repairs at its Njord and Hyme fields during the year, bringing its total average economic production rate to roughly 6,059 barrels of oil equivalent per day compared from 6,900 barrels of oil equivalent per day the previous year.
Faroe Petroleum said that work on the reinforcement project at Njord is expected to be completed and production resumed in summer 2014 but that the company's average full-year production is scheduled to be down again in 2014, to a range of between 4,000 and 6,0000 barrels of oil equivalent per day from all fields.
The company did manage to increase its proven and probable reserves by 35% over the year to roughly 27.2 million barrels of oil equivalent at January, and it is planning significant high impact drilling in 2014, after recently securing interests in ten new exploration licences.
Faroe Petroleum shares were up 1.1% to 114.25 pence Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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