RXP.L Share News (RXP)

Roxi Petroleum, the Central Asian oil and gas company with a focus on Kazakhstan, has today announced a preliminary 2010 loss after tax of $48m, versus last year´s loss of $31m. A hard year no doubt for an exploration firm which barely generates any revenues. Those amounted to just 123,000 for all of last year. On the negative side of things, their partner at the BNG field, Canamens, unexpectedly decided not to provide all of the funding under their agreement to acquire an interest in BNG LLP. The company also faced some challenges, such as delays in obtaining the necessary licenses to move its core assets' operations forward during the year, particularly for Galaz, due to the re-organization at the Government's Ministries that occurred part way through the year. As if that were not enough, during the period under review important changes were made to both the subsoil and taxation legislation. As well, the partial disposal of its interest in BNG to Canamens released some of the unrealized currency translation losses that it had previously capitalized. The above seems to have been compensated for by the additional financing arrangement agreed with Vertom International, this year, for $6m, to meet it immediate cash obligations. Also this year, Roxi has completed a $50m farm-out agreement for the Galaz field with Korean multi-national LG. Quite important as well, $23.3m of loans previously due to Canamens were novated to Roxi in exchange for a 1.5% royalty payable by Roxi, to Canamens, based on future production from BNG.Having overcome those obstacles the company´s stated aims in the near-term are "funding new farm-out partners for BNG and Beibars as well as achieving production from BNG and Galaz, which are now close to achieving pilot production, with oil discoveries having already been made on both assets and with the majority of the licensing and associated permits now in place to start pilot production in the latter part of 2011".Shares of Roxi Petroleum closed flat today in London trading, at 3.88p.AB