3rd Nov 2014 08:44
LONDON (Alliance News) - Kea Petroleum PLC shares were trading higher on Monday morning after the company said its pretax loss narrowed significantly in its most recent full financial year on the back of a jump in revenue and much lower writedowns on exploration assets.
Kea's pretax loss for the year to May 31 was GBP3.8 million, reduced from the GBP9.3 million loss posted last year. The loss in 2013 was pushed higher by the GBP7.2 million writedown the company took on exploration assets, a number which fell to only GBP1.6 million this year.
Revenue for the company was up to GBP2.1 million from GBP829,000 a year earlier on the back of increased sales of hydrocarbons associated to production from the Puka-1 and Puka-2 wells in New Zealand.
Despite that revenue rise, post the period end in August, Kea said it has plugged and abandoned the Puka-3 well at the same site, news which saw shares in the company lose half their value.
The company also said the discovery of oil-water contact at Puka 30 metres higher than had been expected has reduced the total potential reserves at the site significantly.
But Kea said despite the challenges at the Puka prospect, it has found a newly-mapped structure, called Shannon, directly beneath the Puka field.
Kea Chairman Ian Gowrie-Smith said the company "can't afford not to drill the new Shannon structure".
Kea also said it is in talks with potential industry partners on the farm-out of the Mauku project, also in New Zealand.
Kea shares were up 15% to 0.460 pence in early trade, making it one of the best performers in the AIM All-Share index.
By Sam Unsted; [email protected]; @SamUAtAlliance
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