LONDON (Alliance News) - Ruspetro PLC Friday said it narrowed its pretax loss in the first half, boosted by a prepayment facility secured with Glencore PLC, and said its next phase of horizontal drilling at the Pottymsko-Inginsky licence block is expected to start in March 2015.
But the oil and gas development and production company warned on its future if it is unable to adequately restructure its balance sheet.
Ruspetro said its pretax loss in the six months to June 30 narrowed to USD35.9 million from USD50.1 million a year earlier, with revenue falling to USD27.8 million from USD42.5 million last year.
Ruspetro was boosted by two prepayment facilities signed with Glencore PLC in the period. The first, announced in March, was for USD30 million and was to renew and replace an existing facility already in place between the two companies. The new one-year facility requires Ruspetro to deliver 1,200 barrels of per day of crude oil to Glencore for export. The USD30 million was partly used to repay the initial facility and therefore resulted in net proceeds to Ruspetro of USD20 million.
The second facility has been signed with a Russian subsidiary of Glencore for USD22 million, a one-year deal to deliver 1,680 bopd of crude oil to supply the domestic market.
The company said it expects initial flow rate results from well 251 at the Pottymsko-Inginsky licence block to be disclosed to the market in October and it intends to drill a further horizontal well to the north west of well 214 by the end of this year. In addition, the next phase of horizontal development drilling at the site is due to start in March 2015.
Elsewhere, Ruspetro is in talks to restructure its balance sheet and secure the funding it requires to continue the appraisal and horizontal well development programme, along with working capital. The company said its financial position is a material uncertainty which may cast doubt on its ability to continue as a going concern.
Due to the financing issues it faces, Ruspetro said it is not actively pursuing farm-out options to develop the field at present, instead focusing on growing production and revenues and subsequently strengthening its ability to negotiate further farm-out discussions.
Ruspetro shares were down 3.9% to 12.49 pence on Friday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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