LONDON (Alliance News) - Frontier Resources International PLC saw its shares slide Wednesday after it reported a wider net loss for the first half of its financial year and said it was continuing to seek ways of raising fresh capital to fund its future exploration and development work.
The company reported a net loss of USD681,000 for the six months to June 30, wider than the USD588,000 loss it reported a year earlier, as it booked USD239,000 in exchange differences on translation of foreign operations. The company doesn't make any revenue yet, so its loss depends on costs. It posted a pretax loss of USD442,000, narrowed from USD557,000 a year earlier, as administrative expenses and share payments rose, but not by as much as the USD185,000 expense it had booked for its AIM admission costs a year earlier.
Frontier Resources explores for onshore oil and gas in the Middle East and Southern Africa and currently has three exploration projects in Oman, Namibia and Zambia. It is currently funding itself from money it raised in recent share issues, but will need more money if it is to continue its exploration and development programme.
It has cash balances of about USD400,000.
"The group continues to evaluate the options for funding its work programme commitments and ongoing working capital requirements, including farming-out an interest or seeking strategic partners in its exploration projects. The group has created a data room and continues to approach industry partners with the intention of farming out an interest in each of its exploration projects in Oman, Namibia and Zambia," it said in a statement.
Frontier added that its directors had agreed to continue deferring a proportion of their remuneration until at least January 1, 2015, an extension of 3 months from the October 1, 2014 date agreed at the time of the company's admission to AIM in July last year.
The company warned of the consequences of not being able to secure new funding, but said it was confident it will be able to do so.
"If future funding was not to become available in an appropriate timescale, the directors would need to consider alternative strategies and an impairment review may be required in respect of the carrying value of the group's assets," it said.
"Nevertheless after making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that funding will be available and that the group will have sufficient cash to fund its planned activities and to continue its operations for the foreseeable future, and at least for one year from the date of approval of these accounts," it added.
Frontier Resources shares were down 17.2% at 1.26 pence Wednesday morning, one of the biggest declines on the AIM All-Share index.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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