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LONDON (Alliance News) - Global Petroleum Ltd Tuesday said its losses widened following a write-down of some of its Namibian assets, but it expects to grow the business through acquisitions in the next 12 months.
Global shares were down 13% to 3.27 pence per share Tuesday morning following the release of its results for the 2014 financial year.
The company's pretax loss widened to USD14.4 million in the financial year ended June 30, from USD2.2 million in 2013. The loss is attributable to increased expenses and a USD10.8 million impairment write-down of the its Namibian assets, following disappointing drilling.
The company does not currently earn any revenue and reported a cash balance of USD17.6 million at June 30, with no debt, it said.
The company?s principal assets are exploration blocks located offshore Namibia and offshore Juan de Nova Island, a French territory in the Mozambique Channel.
Global are currently awaiting for its permit to be renewed for its Juan de Nova site from French authorities, but does not expect a decision to be made before the first-quarter of 2015, it said. Earlier this month, it announced it had agreed a 12-month extension at its petroleum exploration licence in the Walvis Basin, offshore Namibia.
"The last year has been a frustrating one for management and of course shareholders, which has been reflected in the share price, albeit against a difficult exploration and production sector in the stock market, where sentiment has been negative for some time," it said.
"Seeking and evaluating opportunities to acquire suitable new exploration assets [is ongoing]. However the generally poor frontier area exploration results in recent years, including in Africa, is indicative of the scarcity of attractive opportunities, and accordingly your board has been very selective in considering potential investments of the company's cash resources in exploration in these areas," added Global.
"We have re-assessed our strategy of looking for frontier exploration opportunities, and have concluded the company will now balance its existing higher risk/reward portfolio in Namibia and prioritise exploration in proven hydrocarbon provinces, especially onshore, and investment in discovered contingent resources," said Chairman John van der Welle.
The company "expects to make significant progress in growing the business with attractive new assets in the next twelve months," he added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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