25th Jun 2015 09:23
LONDON (Alliance News) - Petrel Resources PLC Thursday said its pretax loss significantly widened in 2014 on the back of lower revenue and a substantial impairment charge against its assets in Iraq as all of its operations continue to be hampered by politics and regulation.
The oil and gas exploration company reported a EUR3.0 million pretax loss in 2014, widening from a EUR526,783 loss in 2013 after revenue from its investments fell to EUR386,000 from EUR1.8 million and it booked a significant EUR2.5 million impairment.
That impairment was against its operations in Iraq due to the "political and legal uncertainty". Petrel did not book any impairments in 2013.
At the end of 2014, Petrel reported a cash balance of EUR1.3 million.
"Petrel has sufficient cash at present expenditure levels to continue for two or three years. This is not an option that the board accepts," said Chairman John Teeling.
Petrel holds a 15% interest in acreage in the Porcupine Basin of the Irish Atlantic through a joint venture with Woodside Energy. Work on the venture is currently being delayed whilst it awaits the Irish government to complete the offshore environmental assessment for the project.
Petrel also holds an interest in an exploration concession in Ghana, which it acquired in 2010, but this project has been hampered over the last five years by the government ratifying the agreement in which Petrel acquired its interest.
"Ratification of the agreement has dragged on for 5 years during which Ghana has become a significant oil producer - in an area south of Tano where our concession lies. For the past year the consortium of Petrel, Clontarf Energy and a local partner have been in litigation with the Ghanaian government and state agencies over an attempt to award ground from our licence in Tano to a third party," said Petrel.
"A court approved agreement was reached. This was acceptable to all parties concerned. The Ghanaian authorities have failed to implement the agreement," it added. Ongoing talks have led to further settlement proposals being offered by the authorities, which as yet are "not acceptable" to the consortium.
"We continue to evaluate possible opportunities in emerging frontier exploration areas. Investors in Petrel, as in most other junior explorers, have seen their shareholding literally decimated in value. We have cash, people and potentially very good ground. There are small signs of life in the stock exchange sector in which Petrel operates. If life blossoms then the potential return is significant," said Chairman John Teeling.
Petrel shares were down 6.7% to 2.80 pence per share on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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