22nd Mar 2018 10:07
LONDON (Alliance News) - Oil and gas company Sound Energy PLC on Thursday said pretax loss from continuing operations has widened due to the significant rise in administrative costs, resulting from increased activities and business growth in Morocco.
For 2017, the company recorded pretax loss from continuing operations of GBP12.3 million, compared with GBP4.7 million pretax loss in the prior year. No revenue was generated in either financial periods.
The widened loss was attributed to rise in administrative costs to GBP8.3 million from GBP4.2 million, and losses from derivative financial instruments, which totaled GBP1.9 million, versus a GBP583,000 gain a year ago.
The Morocco focused upstream oil and gas company completed a successful extended well test on TE-7 and drilled a third well, TE-8, and acquired Oil & Gas Investment Fund's interests in Morocco. The company said that the company continues to progress its 2,900 kilometer 2D seismic programme which is now already more than 47% complete. The business growth and rise in activity in Morocco contributed to the pretax loss from continuing operations. The loss from derivative financial instruments reflects the change in share price during the year.
In addition the company reported that the loss from discontinued operations widened to GBP21.8 million from GBP8.7 million in 2016 primarily due to an impairment charge of approximately GBP19.0 million , resulting to an impairment of the Badile licence, due to the "unsuccessful drilling", following sub-commercial well results.
Cash at the of 2017 was GBP22 million, versus GBP46.8 million last year.
"The company continues to believe that the TAGI and Paleozoic plays across Tendrara, Anoual and Matarka have the potential to become a material hydrocarbon province on a regional scale and therefore transform both Sound Energy and the Moroccan gas industry. Unlocking such a province requires time and technical skill and none of this would be possible without the efforts of our people, our shareholders and other stakeholders," CEO James Parsons & Chairman Richard Liddell said.
Sound shares were down 2.4% at 48.19 pence per share on Thursday morning.
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