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(Alliance News) - Cadogan Petroleum PLC swung to a first half profit, attributed to a rise in value of a convertible loan note held in a partner.
For the six months to June 30, Cadogan posted a pretax profit of USD2.7 million, improved from a USD422,000 loss a year before. This was the result of a USD4.4 million net fair value gain on a EUR13.4 million convertible loan note received from Proger SpA. The gain was due a "competitive conversion price" on the loan and the Italian company's earnings growth, Cadogan said.
Cadogan's own share price spiked as high as 13.25 pence in April from 8.50p on February 1. However, they have since given up that gain. The stock was up 4.0% on the day Tuesday in London at 6.50p each.
Operationally for Cadogan, revenue fell by 38% in the first half of 2019 to USD3.3 million from USD5.3 million a year before. Gas trading revenue alone fell sharply to USD900,000 from USD3.1 million which the company said was due to "the collapse in the gas price". Administrative expenses stayed flat at USD2.0 million.
Average production increased by 27% to 297 barrels of oil equivalent per day from 234 BOEPD.
The company has working interests in two gas-condensate and oil exploration licences in Ukraine: Bitlyanska and Monastyretska. Cadogan in July made an application to acquire a 20-year licence at Monastyretska and is preparing a bid for a 20-year licence at Bitlyanska.
Looking ahead, Cadogan said: "The company will continue to actively pursue opportunities outside of Ukraine, to leverage its competence and low-cost structure in order to create long-term value for its shareholders. In parallel, the company will work with Proger to exploit potential operational synergies and will use their international footprint to further expand the sourcing of potential investment opportunities."
