LONDON (Alliance News) - Petroneft Resources PLC on Thursday said it remained in the red during 2015 after its work programme produced mixed results and only delivered a tiny rise in production during the year.
Petroneft reported a pretax loss from continuing operations of USD7.7 million in 2015, narrowed slightly from the USD8.4 million loss in 2014, despite revenue plummeting to only USD2.4 million from USD19.2 million.
The company booked a series of charges in 2014 which were not repeated and many costs in 2015 were lower than in the year before. A USD5.6 million loss was booked in 2014 against the sale of a 50% stake in Petroneft's main asset, Licence 61, to its current partner Oil India Ltd.
Administrative expenses dropped to USD1.4 million from GBP3.7 million, intra-group loan interest charges fell to GBP284,449 from GBP2.4 million, and finance revenue almost doubled to USD3.0 million from USD1.6 million.
The majority of the pretax loss in 2015 came from a USD8.8 million loss representing Petroneft's share of losses from the 50:50 subsidiary with Oil India during the year, WorldAce Investments Ltd, compared to the USD304,439 loss booked in 2014.
Petroneft said 11 wells were drilled on its acreage during the year, but average gross production only managed to rise to 2,021 barrels of oil per day from the 1,997 barrels per day in 2014. However, gross production has risen since then to around 3,000 barrels per day - with Petroneft entitled to half.
"2015 was a busy year for PetroNeft, during which the company carried out an extensive drilling programme, in partnership with Oil India, across Licence 61. We have gained significant experience in horizontal drilling, deepened our understanding of the licence and have identified additional upside at Sibkrayevskoye and South Arbuzovskoye," said Chief Executive Dennis Francis.
"After three weeks of production the A-214 horizontal well at South Arbuzovskoye is still producing over 850 barrels per day and the pressure decline is very slow. In the near term, we look forward to the A-215 horizontal well results at South Arbuzovskoye and the commencement of drilling on the S-374 delineation well at Sibkrayevskoye," he added.
Although work is being undertaken to drill new wells, the existing wells within the portfolio faced declines in 2015.
Notably, Oil India is fully funding the pair's work programme in both 2016 and 2017, providing a shareholder loan to the joint venture company WorldAce.
Following the drilling on Arbuzovskoye and Sibkrayevskoye in 2014 and 2015, the pair plan to develop the southern part of the Arbuzovskoye oil field and drill another delineation well at Sibkrayevskoye in 2016, with a view to commencing development of Sibkrayevskoye in 2017.
Petroneft shares were up 1.3% to 1.90 pence per share on Thursday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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