24th Nov 2016 11:39
LONDON (Alliance News) - Hardy Oil & Gas PLC on Thursday said little progress has been made in the first six months of the current financial year and said the ongoing issues that are slowing the development of its projects in India are likely to continue into 2017.
The Indian oil and gas firm reported a pretax loss of USD1.2 million n the six months to the end of September compared to the USD1.4 million loss booked a year earlier, primarily driven by a fall in administrative costs.
"Our objectives remain the securing of key stakeholders' approvals and the initiation of activity that will take us closer to realising production from our portfolio of assets for the benefit of our shareholders," said Chief Executive Ian Mackenzie.
Hardy Oil has had a tough time developing its projects in India this year and that ultimately resulted in the company failing to deliver its goals in the financial year to the end of March. The difficulties have partly arisen from the Indian government's decision to update its energy policies covering marketing, pricing and the freedom that companies have for deep water or high temperature operations.
Hardy has also been attempting to resolve the ongoing arbitration concerning the CY-OS/2 block. The government is currently attempting to take the block away from the joint venture, in which Hardy Oil has a 75% stake, after three chief justices of India, which no longer hold their posts, ruled to restore the block to Hardy and partners.
On Thursday, Hardy said the government of India has "escalated their appeal to the Supreme Court of India" after losing a previous appeal in late July. The Supreme Court appeal is expected to continue into 2017, Hardy said.
Hardy believes the PY-3 project could initially produce around 3,000 barrels of oil per day before potentially rising to 8,000 barrels per day - but said in June that it would chop the plan if it was not approved in the short term, as its partners have caused delays.
Hardy said Thursday that it has continued to work with government officials and partners to find a "viable development solution to recommence production and optimise reserves" for PY-3.
"Well monitoring activity has been proposed and failing the timely adoption of a full field development plan and past budgets, planning for abandonment will need to be initiated," said Hardy on Thursday.
At the other project in India, GS-01, Hardy Oil said a recent agreement with government officials should allow its to progress its plans for the project going forward, but said the matter will not be fully resolved until next year.
Cash at the end of September stood at USD15.9 million and the balance sheet remains debt free. Cash at the end of March stood at USD17.6 million.
Hardy Oil shares were untraded Thursday, last closing at 17.00 pence.
By Joshua Warner; [email protected]; @JoshAlliance
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