LONDON (Alliance News) - Nighthawk Energy PLC said Wednesday it swung to a pretax loss in the first half due to higher exceptional costs and a big fall in revenue as the company struggled in the current low oil price environment.
Nighthawk said its pretax loss for the half to the end of June was USD7.2 million, swung from a USD8.5 million profit a year earlier. The group booked exceptional costs after plugging and abandoning four wells deemed non-commercial and taking impairment charges on nine wells due to reduced expectations for those prospects amid the currently depressed oil and gas market.
Revenue fell to USD16.0 million from USD25.4 million, as while Nighthawk sold more oil in the half, 351,609 barrels against 345,558 a year earlier, it did so at a sharply lower average price of USD44.32 per barrel, compared to USD74.61 in the second half of 2014.
The company said it maintained production levels despite limited new drilling activity as it focused on capital efficient production. The oil price has declined sharply in the past year, leading companies to scale back their operations to ensure they remain economic.
"The first half of the year was challenging with low oil prices and our lack of drilling. However, now with the recent capital raise, we are well positioned to execute our five-well drilling program during the remainder of this year," said Rick McCullough, Nighthawk's chairman.
Shares in Nighthawk were down 2.5% to 3.20 pence on Wednesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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