LONDON (Alliance News) - Andes Energia PLC Thursday reported a wider pretax loss in 2014, despite revenue more than doubling, amid more impairments and higher costs, but the company said its production rate has more than doubled in 2015 following its acquisition of Interoil Exploration and Production ASA at the start of the year.
The oil and gas company focused on Latin America reported a pretax loss of USD7.9 million for 2014, significantly wider than the USD94,000 loss reported in 2013, despite revenue more than doubling as impairments, increased costs, and higher finance expenses took their toll.
Revenue more than doubled to USD48.2 million in 2014 from USD22.5 million. The company said the majority of revenue growth was driven by increased production and from acquisitions made in 2013.
However, Andes Energia booked USD3.8 million in impairments in the year compared to nil a year before, administrative expenses rose to USD10.0 million from USD9.4 million, and distribution costs almost doubled to USD3.1 million from USD1.7 million.
Finance costs also rose to USD14.0 million from USD8.6 million, whilst finance income dropped to USD3.8 million from USD6.2 million. Andes Energia also benefited from a USD6.2 million gain on exceptional items in 2013, something that it did not repeat in 2014.
Production rose by 73% in 2014 to 1,700 barrels of oil per day from only 916 barrels per day and Andes Energia drilled a total of 25 development and appraisal wells during the year. The company achieved an average selling price of USD73 per barrel throughout 2014. All current production comes from the Mendoza province in Argentina.
However, production in 2015 has almost doubled to a current rate of 3,452 barrels per day. Production from the Mendoza province is running at 1,952 barrels of oil per day, and production has begun making an impact in Colombia, which is averaging 1,500 barrels of oil per day.
The production from Colombia is a result of Andes Energia acquiring a 51% controlling interest in Interoil Exploration and Production ASA for a consideration of USD4.7 million at the start of 2015. Average prices in 2015 have so far improved, averaging around USD77 per barrel.
The company said borrowings rose in the year to USD58 million from USD56 million, with net current liabilities totalling USD2.0 million at the end of 2014 compared to USD1.0 million a year earlier.
At year end, the group had cash resources of USD10.6 million compared to USD8.2 million at the end of 2013, which management believes together with the free cash flow generated from existing activities will be sufficient to meet its ongoing working capital requirements.
The company plans to drill 30 new wells in 2015, which will be funded primarily by field production cash flow.
Andes Energia shares were up 2.3% to 31.98 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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