27th Jul 2015 08:17
LONDON (Alliance News) - Sterling Energy PLC on Monday said its operations were unprofitable in the first half of the year, causing the company to swing to a loss at the pretax level.
The oil and gas company reported a pretax loss of USD1.5 million in the first half of 2015, swinging from a USD1.7 million profit a year earlier, as revenue plummeted to USD3.6 million from USD9.1 million.
Sterling said the 60% fall in revenue was caused by the fall in world oil prices, which have dropped to around USD54 per barrel on Monday from around USD112 per barrel in July last year, alongside a fall in lifting volumes. Overall, its cost of sales outstripped revenue.
In the first half, there were two production liftings resulting in 61,656 barrels of oil sold net to Sterling, down from 81,988 barrels from two liftings a year earlier. Overall, Sterling's net production entitlement in the period was 358 barrels per day, down from 436 barrels per day.
"Production performance for the Chinguetti field, offshore Mauritania, has been consistent with the operator's projected 2015 decline rate. Production operating expenditure is being reviewed and further optimised," said Sterling.
The Chinguetti field is the only producing asset in which Sterling is invested, holding an 8% economic interest and a 5.3% royalty.
"The current depressed oil price continues to have an onerous impact on the Chinguetti project and future joint venture economics. Discussions continue amongst respective stakeholders with the objective to achieve an agreed and effective field decommissioning plan," it added.
At the end of June, the company said it had a cash balance of USD112.2 million with no debt.
By Joshua Warner; [email protected]; @JoshAlliance
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