9th Apr 2020 12:00
(Alliance News) - Hydrocarbon producer Igas Energy PLC on Thursday reported a widened loss due to rising one-off costs and added that it has cut its budget for the new year due to oil price weakness.
In 2019, revenue fell 4.7% to GBP40.9 million from GBP42.9 million and Igas Energy's pretax loss widened to GBP59.1 million from GBP25.1 million in 2018.
Asset write-offs totalled GBP53.9 million, up 86% from GBP29.1 million in 2018.
Igas added: "Oil prices remained volatile in 2019 with the average monthly price of Brent crude ranging between USD59 a barrel and USD71 per barrel. The lower average price of USD64 barrel for the year versus USD71 barrel for 2018 had a negative impact on our revenues."
Oil prices plunged dramatically in March after top exporter Saudi Arabia launched a price war in response to a failure by leading producers to strike a deal to support energy markets.
Travel restrictions and lockdowns due to the Covid-19 outbreak has additionally heightened pressure on demand.
On Thursday morning in London, ahead of a key meeting between of oil producers, brent was quoted at USD34.18 a barrel. Brent oil prices were trading at around UD65 a barrel before the Saudi-Russia price war broke out.
"Given the fall in oil prices, we have reviewed our capital expenditure programme for the year and reduced it principally to maintenance capex, abandonment and capital for projects already in execution," Igas said.
Capital expenditure forecasts for 2020 have been revised down to roughly GBP6 million.
Igas added: "We will continue to review our priorities to ensure we weather any prolonged depressed oil price scenario. There remains, however, material uncertainty of the potential impact of Covid-19 on the group's operational activities."
Shares in the company were 2.4% lower at 29.27 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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