26th Sep 2018 11:19
LONDON (Alliance News) - Zoltav Resources Inc on Wednesday reported a rise in first half profit on the back of costs cuts, as gas production declined at the company's West Bortovoy project in Russia.
Shares in the oil & gas company were down 9.4% at 16.77 pence on Wednesday.
Gas sales, which constitute bulk of Zoltav's revenue, dropped to RUB667.5 million, or around GBP7.7 million, for the six months to June-end from RUB784.3 million recorded a year ago.
Average net daily production at Bortovoy project fell by 18% to 6,151 barrels of oil equivalent per day from 7,480 boe/d. First half natural gas production stood at 6.3 billion cubic feet, down from 7.7 bcf, while oil and condensate output totaled 60,558 barrels versus 68,713 bbls.
The drop in production, which was partially offset by higher commodity prices, was attributed to suspension of drilling programme in the Permian fields on West Bortovoy pending interpretation of 3D seismic data.
First half group revenue fell 10% to RUB830.6 million from RUB924.5 million.
Pretax profit grew to RUB101.1 million from RUB99.0 as the company cut operating, administrative, and selling expenses to RUB88.2 million from RUB108.1 million. The company also reduced its other expenses, mainly comprising offshore expenses, by 78% to RUB7.3 million.
Zoltav Independent Non-executive Chairman Lea Verny said the profit increase despite the decline at West Bortovoy was "achieved as a result of our team's continued dedication to operational efficiency".
Verny noted that a new technical team had been appointed in May with the intent to "execute an exploration programme targeting the deeper structures on West Bortovoy, to enhance output from existing and new well stock producing from the shallower Permian structures and, in the longer term, to devise a strategy to commercialise East Bortovo".
"We are delighted as we believe we have been able to attract one of the best geotechnical teams in the country to the project. We look forward to sharing over the coming months insights from the seismic interpretation programme as we prepare for a busy work programme in 2019," Verny said.
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