LONDON (Alliance News) - Endeavour International Corp Tuesday said its pretax loss widened in its second quarter after no oil was lifted by tanker from its Alba field during the period despite its overall production rates being above guidance.
The oil and gas exploration company said its pretax loss widened to USD37.1 million for the three months ended June 30 from USD2.6 million during the previous year as its revenues fell 65% to USD44.9 million.
Endeavour did note that its production for the quarter exceeded the company's revised guidance range of 10,500 to 11,500 barrels of oil equivalent per day, reaching 12,900 barrels compared with 9,500 barrels per day previously.
Despite this, the company's sales volumes halved to 7,400 barrels of oil equivalent per day from 14,500 barrels for the quarter as it did not have a lifting from its Alba field in the UK North Sea during the quarter, so revenues were significantly lower than would have been if based on
physical production.
Endeavour estimates that there will be three to four liftings per year at the Alba field. The most recent lifting occurred on July 4 and the associated revenues of roughly USD50 million will be reflected in its third quarter figures.
The company said that during the quarter it was able to establish production from both wells at its Rochelle Field in the UK North Sea and experienced periods during the quarter where production rates exceeded 100 million cubic feet of gas per day and 4,000 barrels of oil equivalent per day at the field.
The company said its pretax loss for the full half year widened to USD78.4 million from USD15.7 million a year earlier, as its six-monthly revenues fell 24% to USD139.0 million and it suffered a USD19.0 million litigation settlement expense.
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.
On Tuesday, the company said its producing fields will be modestly impacted by routine maintenance and other infrastructure improvements during the third quarter. It expects average daily physical production volumes to be in the range of 9,500 to 10,500 barrels of oil equivalent per day for the third quarter.
Endeavour shares, which also trade on the New York Stock Exchange, were last quoted in London in June at 1.58 pence.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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