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(Alliance News) - Caspian Sunrise PLC on Tuesday said its loss widened slightly in the first half of 2019 as falling production volumes pulled down revenue.
Shares in Caspian were up 2.5% at 11.12 pence in London in midday trading.
The Kazakhstan-focused oil and gas company posted a pretax loss of USD1.5 million for the six months to June 30, widened slightly from USD1.4 million a year before.
Revenue dropped 12% to USD4.4 from USD5.0 million. Caspian said this reflected "a steady price for the oil sold but declining production volumes".
Executive Chair Clive Carver explained that the company's "need to maximise cashflow while developing both the MJF structure and the 4 deep well prospects, together with the impact of the much delayed upgrade to export status at the MJF structure" necessitated running "the five producing MJF wells harder than would otherwise be the case."
This produced "a sharp fall off in production", especially in the second quarter but also in the third.
"Recently we have started to correct this with routine maintenance, focused on cleaning the wax build ups in the oil pipes. The two wells to be so treated have both increased daily production by more than 50%. We therefore do not believe these low daily production numbers will continue much beyond the end of Q3 2019," said Carver.
The company's loss after tax was much wider, USD2.3 million versus USD376,000 the year before. This was due to tax of USD785,000 incurred, versus a USD1.0 million tax gain a year before.
In terms of outlook, Carver said: "We are working towards having each of the four deep wells drilled on a 90-day flow test within a calendar month of the date of this report. However, while the management team remains quietly confident, as long-term investors will know, there can be no guarantee these plans will come to fruition on the timelines indicated.
"Additionally, we are working on ambitious plans to move the business forward to take advantage of other opportunities we have open to us."
