30th Jun 2016 13:20
LONDON (Alliance News) - Nostra Terra Oil & Gas Co PLC on Thursday said production was over 80% higher year-on-year in 2015, but the fall in oil prices offset the increase and brought revenue down whilst natural declines in some wells also hit the company's margin.
The producing oil and gas company said its pretax loss amounted to GBP2.3 million in 2015, widened from the GBP843,000 loss a year earlier, as revenue declined to GBP594,000 from GBP1.3 million.
Cost of sales continued to outstrip revenue, producing a gross loss of GBP1.3 million in 2015 compared to a loss of GBP399,000 last year.
Administrative expenses doubled to GBP689,000 from GBP318,000, and Nostra Terra also booked a GBP157,000 loss from its joint venture, something that was not present in 2014. Finance expenses were slightly higher at GBP122,000 compared to GBP107,000.
Net production in the year rose significantly to 64,063 barrels of oil equivalent from the 35,380 barrels produced in 2014, mainly thanks to an expansion in Egypt. However, the fall in oil prices hit revenue and offset the significant rise in production.
Nostra Terra said a natural decline in production wells also hit the company's margin during the period.
During 2015, Nostra Terra secured a 25% stake in the East Ghazalat concession in Egypt operated by North Petroleum International Co, secured approval for exploration at the Paw Paw prospect in the US, and arranged a three-year extension to its USD25.0 million lending facility until the end of January 2019.
"Moving into 2016 we continue to generate revenue from our existing assets, in particular Chisholm Trail, Bale Creek, and Verde. Multiple wells exist on each prospect thus creating a portfolio where the company isn't risked on a single well or operator," said the company.
"As some of these fields develop further we will look to reinvest capital in fields at an earlier stage in the cycle where further upside exists," it added.
Nostra Terra sold a 20% interest in Chisholm Trail in June this year for USD2.1 million, which should be completed in August, and it said it managed to cut overheads by 40%, also in June this year. Nostra Terra reorganised its capital in May after raising funds from a placing in March.
Nostra Terra added it is in discussions about acquiring a 60% interest in producing assets in the Permian Basin in New Mexico.
Nostra Terra shares were up 2.1% to 3.06 pence per share on Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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