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LONDON (Alliance News) - Global Petroleum Ltd on Monday said its loss narrowed in the most recently completed financial year, after the company booked considerably fewer impairments in the period and as it tries to use its strong cash balance to acquire new projects in the currently depressed market.
Global Petroleum reported a USD4.5 million pretax loss in the year ended June 30, substantially narrower than the USD13.5 million loss reported a year earlier.
The company, which does not generate any revenue, managed to reduce its loss after impairments only totalled USD354,695, compared to USD10.1 million a year earlier. However, that was partially offset by higher administrative and remuneration costs, alongside a wider foreign exchange loss compared to a year ago.
Global Petroleum is currently focused on oil and gas assets in Africa and the Mediterranean. In Namibia, the company is in talks with the Namibian authorities about possible terms for the continuation of the licence beyond the current extension period, which terminates in December 2015.
The company's four exploration applications offshore Italy are progressing towards approval of the environmental impact assessment documentation, which was originally submitted in mid-2014.
"EIA approvals have recently been granted by the Italian authorities to other exploration and production companies with long-standing licence applications in the offshore Adriatic, and the company regards this recent development as very encouraging for the progress of its own applications," it said.
As previously announced, Global Petroleum plans to exit from the Juan de Nova project in the Mozambique Channel following a lengthy wait for a formal decision from French authorities. The company had been waiting for over two years.
The company is now looking to restructure its portfolio, and has decided to balance its existing higher risk/reward portfolio in Namibia and prioritise exploration in proven hydrocarbon provinces, especially onshore.
It also is looking to acquire new projects, and said it should benefit from its strong financial position by targeting deals with companies which have little cash and very limited access to capital, but also said this is making sealing a deal more difficult.
Global Petroleum's cash balance stood at USD12.7 million at the end of June with no debt, compared to a balance of USD16.8 million at the end of June 2014.
"The company's cash position therefore puts us in an advantageous position compared to many peers, but in order to create value in potential deals it is necessary to have visibility as to the availability of funds to finance new projects following an acquisition," Global Petroleum said.
Global Petroleum shares were trading flat at 1.75 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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