Sterling Energy Loss Widens As Chinguetti Production Falls In 2017

22nd Mar 2018 11:33

LONDON (Alliance News) - Oil and gas company Sterling Energy said on Thursday its loss widened in 2017 as revenue fell due to substantially lower production in the year.

The pretax loss for the year widened to USD9.0 million from USD8.5 million the year before, on revenue that declined to USD4.4 million from USD4.8 million in 2016.

The reason for the drop is due to a considerable fall in net oil production from the Chinguetti field in Mauritania, dropping to 199 barrels of oil per day, down 29% from 279 barrels averaged the prior year. This was as a result of operational difficulties related to subsea valve integrity in the third quarter.

Gross volumes lifted and sold decreased 36% to 1.4 million barrels over three cargo liftings from 2.2 million barrels over four cargo liftings in 2016. This lead to a rise in the direct operating cost per barrel in 2017 to USD68.80 from USD54.40.

Throughout the year, Sterling Energy has continued to reduce its exposure to mid-term exploration following unsupportive markets, with with the exiting of the Mauritanian C-10 block at low cost, reducing its position in the Odewayne block in Somaliland and terminating the funding agreement over the Chinguetti field in January 2018 following the cessation of production.

"The outlook for 2018 to 2019 is positive. The company is now in a good shape to pursue real time opportunities in our regions of focus and with strong expertise. Should market conditions worsen, we will preserve our capabilities and strengths, accordingly," said Chairman Michael Kroupeev.

Shares in Sterling Energy were down 8.5% at 12.62 pence on Wednesday.

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