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LONDON (Alliance News) - Empyrean Energy PLC Tuesday reported a small fall in pretax profit in the last financial year but reported a large rise in production and drilling activity at its flagship project in the US.
The US-focused oil and gas company reported a tiny fall in pretax profit to USD5.1 million in the year ended March 31, from the USD5.2 million profit booked a year earlier despite revenue rising to USD16.0 million from USD13.9 million.
Although revenue rose, the company's gross profit only experienced a small lift to USD8.8 million from USD8.4 million and that was offset by an increase in administrative, remuneration and compliance expenses to USD1.9 million compared to USD1.8 million a year earlier alongside higher finance costs totalling USD1.8 million compared to USD1.4 million.
The company's flagship asset is its 3% interest in the Sugarloaf AMI project in the US, which generates all of Empyrean's current revenue and is operated by Marathon Oil Corp.
Net production to Empyrean from Sugarloaf in the year totalled 366,468 barrels of oil equivalent, a 9% year-on-year rise from 335,305 barrels of oil equivalent.
That substantial and "record" level of production in the year was partially offset by WTI oil prices falling over 50% year-on-year, said the company.
On Tuesday morning WTI was trading at just under USD45 per barrel, representing a dramatic fall from around USD92 per barrel a year earlier and the USD91 per barrel at the end of September 2014, which was the half-way point for Empyrean's financial year.
"I am pleased to report that our tenth year of operations has seen us achieve further revenue growth despite challenging market conditions. Empyrean succeeded in sustaining last year's very strong growth in production, and as a result has reported a 15% revenue growth, notwithstanding the unprecedented fall in global oil prices in the second half of 2014," said Chairman Patrick Cross.
That rise in production came after Marathon drilled a further 130 wells during the year, of which 84 were brought into production. In the last financial year, Marathon only drilled 43 wells and brought 39 of them into production, demonstrating a ramp-up in activity.
Empyrean shares were up 1.8% to 6.49 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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