LONDON (Alliance News) - Red Emperor Resources NL Tuesday reported a significantly wider loss for its last financial year as it wrote off USD9.6 million of exploration costs, but it said it is still on the look out for a new asset that can broaden its portfolio and drive shareholder returns.
The company currently has interests in two on-shore oil and gas exploration blocks in the Republic of Georgia and interests in two licenses in Puntland in Somalia.
It reported a net loss of USD10.2 million for the year to June 30, wider than that USD181,600 loss it reported a year earlier, due to the exploration cost writedown, and as revenue fell to USD422,654, from USD523,783.
The company holds its Somalia interests in production sharing contracts. The Somalian government is currently discussing with the states, including Puntland, revisions to the country's hydrocarbon laws, particularly with regards to revenue sharing.
"These issues are delicate and discussions are ongoing," Red Emperor said, adding that it has verbal confirmation that its joint venture in the country has valid rights over the licenses but not written confirmation as yet.
"Discussions continue with the State and Federal governments to ensure alignment with regards to contracts and a secure working environment, as well as a commitment to exploration in Puntland and the unlocking of what is believed to be material natural resources within its boarders," Red Emperor said.
The company said it is continuing to evaluate new investment opportunities, although it doesn't want to take on too much extra leverage.
"In the short term, the Red Emperor is also looking to add more technical experience to its board in the coming months and has already shortlisted a number of candidates, which it believes will assist in the ability to review and hopefully add a suitable asset to the company's current portfolio," Executive Director Greg Bandy said.
"As the current contract periods draw near and existing negotiations unfold, we believe that the next 12 months has the potential to be one of reinvigoration and renewed focus for Red Emperor. In the meantime, remaining flexible, opportunistic and well capitalised continues to be the Company's competitive advantage," he added.
Red Emperor shares were down 16% at 2.50 pence in London Tuesday morning. Its shares on the Australian Securities Exchange fell 7.7% to AUD0.0480.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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