LONDON (Alliance News) - Nighthawk Energy PLC Tuesday said it swung to a pretax loss in 2014 on the back of over USD20 million in exceptional items related to abandoned wells and the fall in the oil price, despite revenue soaring on increased production and sales.
The oil and gas company operating solely in the US reported a pretax loss of USD5.7 million in 2014, from a USD12.4 million profit in 2013, even though revenue almost doubled to USD47.5 million from USD26.2 million.
Exceptional items totalled USD20.3 million compared to only USD1.8 million a year earlier. Nighthawk said around USD12.7 million was related to the fall in oil prices with the remaining USD6.7 million attributable to seven wells that were plugged and abandoned during the year.
Nighthawk's administrative expenses rose to USD7.3 million from USD5.5 million, finance costs rose to USD5.8 million from USD2.1 million, and finance income fell to USD367,000 from USD1.1 million. The company also benefited from a USD3.2 million gain on an acquisition in 2013 that was not repeated in 2014.
Earnings before interest, tax, depreciation, amortisation and exceptional items increased to USD27.4 million from USD15.8 million.
Nighthawk sold 575,275 barrels in the year, up from 290,664 barrels, at a rate of around 1,576 barrels per day but the average selling price declined to USD83.02 per barrel from USD91.05 per barrel.
"Despite the deteriorating oil price in the fourth quarter, 2014 was a successful year with record production and sales levels. Production nearly doubled over 2013 levels and revenues increased by 81%. We also successfully drilled and completed 12 wells during the period, with new oil discoveries in our Snow King field," said Chairman Rick McCullough.
"As we outlined earlier this year, following processing and interpretation of the 3D seismic and selection and permitting of well locations, we expect to complete the first four wells of our six well drilling commitment later this year (on the Snow King field)," he added.
In order to protect itself from lower oil prices, Nighthawk started a hedging programme in late 2014, and said it had realised USD2.7 million in hedging revenue in the first four months of 2015.
"Despite the challenging, but improving, oil price environment, we believe that Nighthawk's highly attractive well economics, the de-risking of the group's acreage and its growing new well location inventory mean it is well positioned to continue to grow and deliver value for shareholders," said McCullough.
Nighthawk shares fell 2.8% to 6.17 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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