(Alliance News) - PetroNeft Resources PLC on Monday reported a widened first half loss despite a cost-cutting effort which saw the company close a US office and reduce activity in two others.
Petroneft reported that it has closed an office in Houston, Texas, downsized an office in Dublin, cut staff numbers in an office in Tomsk, Russia, and "sold off peripheral assets".
In the six months to June 30, revenue fell by 24% year-on-year to USD830,613 from USD1.1 million though finance revenue, which is interest generated from loans Petroneft has issued, rose by 9.7% to USD2.2 million from USD2.0 million.
PetroNeft posted a pretax loss of USD1.5 million, compared with a USD682,639 loss in the first half of 2018. Administrative expenses rose by 27% to USD775,302 from USD612,369
The company reported a USD2.9 million in costs related to its stake in WorldAce Investments Ltd, up 50% from the USD1.9 million costs incurred in the first half of last year. PetroNeft has a 50% holding in WorldAce.
Through its stake in WorldAce, PetroNeft has a 50% interest in oil Licence 61 in the Tomsk Oblast region in Russia.
Gross production in Licence 61 fell by 18% to 1,755 barrels of oil per day from 2,135, though PetroNeft said this represented a "smaller than anticipated decline".
The company also owns half of Russian BD Holdings BV and in turn, has a 50% interest in Licence 67, though PetroNeft reported that activity there has been "quiet since the successful drilling of the C-4 well in 2018".
Non-Executive Chair David Golder said: "The first half of 2019 has been a busy time. The company has continued with the process started in 2018 to test the market whilst at the same time working on a twin track strategy to see how we may improve production and reserves at low cost to increase shareholder value. These approaches are mutually supportive as improvement in production and or reserves, is likely to increase attractiveness and interest in our assets in any sale process."
Shares in PetroNeft were 6.9% lower at 0.60 pence each in London on Tuesday afternoon.
By Eric Cunha; ericcunha@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
