28th Sep 2016 09:59
LONDON (Alliance News) - Oil and gas explorer Volga Gas PLC on Wednesday said it turned to profit in the first half as its average production more than doubled.
Volga, which operates in the Volga region of central Russia, said it made a USD1.5 million pretax profit in the half to the end of June, compared to a USD1.6 million loss a year earlier.
Revenue increased to USD15.9 million from USD7.9 million a year earlier, more than doubling as production did the same. Production averaged 5,933 barrels of oil equivalent per day in the half, up from 2,642 per day a year before, but this was offset on the top-line by a lower oil price and a negative translation effect from the weak Russian ruble.
The growth in production volumes was driven by the start-up of the VM-4 well, while Volga also was boosted by the start of condensate exports in November, which meant its production rate was uninterrupted in the first half. The first half of 2015 had been hit by disruptions in the domestic Russian market.
Volga has upgraded its storage facility and fine-tuned its gas treatment processes in order to keep production flowing consistently and has now finalised plans for the development of an oil reservoir in the Uzen field, with drilling to start in the fourth quarter of 2016.
"We are very pleased to have delivered these sound financial results given the continuing challenges with weak oil prices and difficult economic conditions," said Volga Chief Executive Andrey Zozulya.
"Management will now focus on the final steps required to bring the group's assets up to maximum production and on building opportunities for further growth in shareholder value," he added.
Volga shares were down 2.6% at 47.25 pence on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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