LONDON (Alliance News) - Endeavour International Corp Wednesday said its pretax loss widened in its first quarter, as a range of higher expenses offset increased revenues at the company.
The oil and gas exploration company said its pretax loss widened to USD41.3 million for the three months ended March 31 from USD13.1 million the previous year.
The company said its revenues increased 63% to USD94.2 million from USD57.7 million as sales volumes increased 55% to 11,134 barrels of oil equivalent per day compared to 7,186 barrels as a result of new development wells coming into operation.
However, Endeavour said its general total expenses increased 56% to USD77.0 million from USD49.5 million, as operating expenses increased to USD27.2 million from USD17.5 million and depreciation, depletion and amortization costs doubled to USD45.0 million from USD22.9 million.
The company said its other expenses also more than doubled to USD58.5 million from USD21.4 million, as it was hit by higher interest expenses of USD31.5 million rather than USD21.4 million and it paid out a settlement fee of USD19.0 million during the period.
The multi-million dollar settlement relates to an agreement from July 2011 in which Endeavour entered into agreements with SM Energy for the purchase of oil and gas leases, producing properties, geophysical data, a pipeline and related assets in the Marcellus shale play in the US state of Pennsylvania for an aggregate consideration of approximately USD110 million.
In December 2011, Endeavour terminated the agreements based on its view that title defects to the properties exceeded contractual thresholds and the pipeline was not in compliance with regulatory standards, leading to an SM Energy lawsuit.
The company added that its physical production for the recent quarter averaged 9,440 barrels of oil equivalent per day, and it expects second quarter production to be around 9,000 to 10,000 barrels on average.
Endeavour International shares were untraded. They were last quoted in March at USD2.93 per share.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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