24th Sep 2015 10:15
LONDON (Alliance News) - Oilex Ltd Thursday said its pretax loss significantly widened in the last financial year after the company booked a large amount of impairments against its exploration assets in India.
The Indian gas producer is focused on carrying out its work programme that will start in the second half and stretch into 2016 as it looks to turn its operations cashflow positive before the end of 2015.
The company reported a USD17.4 million pretax loss in the year ended June 30, substantially widening from the USD4.6 million loss reported a year earlier. The company's small amount of revenue came in at USD290,294, slightly higher than USD250,620 last year.
The main cause of the wider loss was the company booking exploration activities amounting to USD13.2 million during the year, of which USD11.9 million was recorded as impairments, compared to only USD1.7 million in the last financial year. Administrative expenses, share-based payments and other expenses also experienced small lifts year-on-year.
Oilex is focused on executing its 2015 to 2016 work programme on the Cambay and Bhandut fields to deliver production growth and cash flow, underpinned by the Cambay field's gross 2P Reserves of 206.0 billion cubic feet of gas plus 8.0 million barrels of liquids.
That work programme will be comprised of the drilling of two wells, Cambay-77H and Bhandut-3, plus a further two dependent on the success of the first two wells. Tenders for the programme are currently being analysed and the first well is expected to be drilled before the end of 2015.
The first and flagship well, Cambay-73, began producing in June.
Also forming part of the approved work programme are 5 well work-overs to boost oil and possibly gas production from existing wells. Oilex said the work-overs are "integral" to the company making its operation cashflow positive, excluding exploration and field development costs, in 2015.
The Cambay field is located at the hub of India's large gas distribution network close to the existing gas pipeline grid in the State of Gujarat. Oilex will use an existing pipeline which already has spare capacity to facilitate its production growth.
"It is anticipated that while the global energy markets are experiencing significant price constraints, with our unique position to supply onshore gas close to infrastructure in Gujarat state, the growing demand for energy should ensure that domestic prices will be insulated from external price pressures," said Chairman Max Cozijn.
Oilex shares were trading down 3.3% to 1.45 pence per share on Thursday.
By Joshua Warner; [email protected]; @JoshAlliance
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