28th Feb 2014 14:19
LONDON (Alliance News) - Victoria Oil & Gas PLC swung into a pretax profit in the half year ended November 30, 2013, as it saw revenue rise and booked a one-off gain relating to its arbitration with RSM Production Corp.
The oil and gas company posted a pretax profit of USD2.5 million, versus a pretax loss of USD5.3 million in the previous year, as revenue rose to USD6.0 million from USD1.7 million.
Although sales costs rose to USD4.8 million from USD1.5 million, administrative expenses dropped to USD1.7 million from USD3.7 million in the previous year, and the company saw a one-off benefit of USD5.2 million following the result of its arbitration with RSM.
RSM had argued it still had a 38% interest in Victoria's flagship asset, the Logbaba Oilfield in Cameroon, but Victoria and its subsidiary Rodeo Development Ltd claimed it had forfeited the stake after it failed to pay cash calls.
The International Chamber of Commerce ruled in favour of RSM. The two companies settled to appoint an independent audit to determine the final balance payable by or to be refunded to RSM.
RSM paid USD16.3 million towards the first cash call for expenses issued by Gaz du Cameroun SA, the Logbaba site's operator, on December 23, 2013, totalling USD24.0 million.
In the previous year Victoria Oil & Gas had prepared its results one the basis that RSM had forfeited its interest in Logbaba. As a result, the company's half-year results included an adjustment which led to a USD5.2 million credit relating to RSM's share of the previous period's operating expenses.
"It is very pleasing to announce a profit for this period. However we acknowledge that this is essentially a reflection of the accounting adjustments made following the aforementioned ICC judgement," said Chairman Kevin Foo.
The company said 2013 had been challenging, and it had had to make hard decisions to refocus its company on its core business. It now believes it has the financial resources and management team to achieve this goal.
At Logbaba the company saw production levels rise to an average of 3.2 million standard cubic feet per day in February from 2.0 million standard cubic feet per day in July 2013, which it said means it has now achieved operational break-even.
Shares in Victoria were trading down 0.2% at 1.27 pence Friday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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