30th Jun 2020 14:38
(Alliance News) - UK Oil & Gas PLC on Tuesday said its interim loss narrowed as administrative expenses more than halved, bringing some positive news following its recently blocked planning application.
Shares in UKOG were down 18% at 0.23 pence in London in afternoon trading.
The UK-focused oil and gas company posted a pretax loss of GBP902,000 for its half-year ended March 31, narrowed from GP1.6 million the year before.
The reduced loss resulted from a sharp 55% drop in administrative expenses to GBP715,000 from GBP1.6 million, attributed to a GBP920,000 "recharge of technical staff to exploration and evaluation assets".
Revenue fell 15% to GBP88,000 from GBP103,000 the previous year due to a lower oil price as well as reduced production from the non-operated Horndean oil field.
Oil sales from the Horse Hill project in Sussex were not included in revenue and were instead "netted of exploration and evaluation expenditure".
Chief Executive Stephen Sanderson said: "From a company perspective the reporting period was dominated by continued operations at our flagship Horse Hill oil field, which has been in stable production of over 300 barrels of oil per day for most of the reporting period. We also submitted planning applications for Arreton oil appraisal on the Isle of Wight and Loxley gas appraisal in Surrey, both projects designed to add further proven recoverable resources and potential near-term cash flow to the company.
"The reporting period has, of course, heralded the beginning of a uniquely demanding period for the nation and for our industry. Dealing with Covid-19 and the subsequent collapse of Brent Crude values has been challenging."
The UKOG CEO said he had been hoping to include a positive outcome from Monday's meeting of Surrey County Council's Planning & Regulatory Committee regarding the Loxley gas appraisal project. However, as announced Monday, the application was refused by a 6 to 5 decision.
"Unfortunately, the precise reasons for refusal remain unclear, which is less than satisfactory, as was the general conduct and progress of the meeting," said Sanderson.
"We have severe reservations regarding the validity of the council's decision. The meetings main discussion centred around a highways issue regarding the suitability of the Dunsfold road adjoining the site to accommodate the envisaged traffic flows. However, the county highway's and planning officers supported the application, stating that the submitted traffic mitigation plans would permit safe use of the road and entry and egress from the site," he added.
At present, UKOG is expecting to appeal the decision through the planning inspectorate.
By Anna Farley; [email protected]
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