13th May 2015 07:46
LONDON (Alliance News) - President Energy PLC Wednesday said it swung to a pretax profit in 2014 on the back of a gain related to its acquisition in Argentina during the year, as revenue was hampered by lower oil prices, and the company said it will seek a partner for its operations in Paraguay in the second half of 2015.
President Energy shares were up 11% to 13.00 pence per share on Wednesday morning.
The oil and gas company focused on Paraguay and Argentina swung to a pretax profit in 2014 of USD14.3 million from a USD4.5 million loss in 2013 as a decline in revenue was offset by a significant fair-value gain on the company's Argentine acquisition.
Revenue fell to USD12.5 million in the year from USD13.4 million whilst its cost of sales rose, squeezing its margin, as the average oil price dropped to USD81 per barrel from USD86 per barrel. Production in the year remained stable at 426 barrels of oil equivalent per day from 428 barrels.
President booked a USD22.6 million gain on the remaining 50% of the Puesto Guardian concession acquisition in Argentina and booked a further USD6.7 million gain after re-evaluating the reserves at its pre-existing Argentine assets. However these gains were partially offset by an impairment of USD11.5 million related to the company's PEL82 license in Australia.
At the end of December, President had a cash balance of USD1.5 million.
In 2015, the company will be conducting a 2D seismic survey over three key prospect areas in the Hernandarias concession in Paraguay, with results of the seismic work expected in the middle of 2015. President said the scale of the opportunity in Paraguay will lead to engaging with potential partners for the project in the second half of 2015, it said.
In Argentina, President will undertake a multi-aspect work programme with well workovers and planned drilling of new production wells.
""Notwithstanding the turbulent current oil price environment, we are confident that it will be another year of progress for President in both our principal areas, Paraguay and Argentina. The achievements of 2014 have left us well placed for the important work still to do in both countries, with our first priority being to continue our focus on both exploration and production whilst maintaining cost control," said Chairman Peter Levine.
By Joshua Warner; [email protected]; @JoshAlliance
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