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(Alliance News) - San Leon Energy PLC on Thursday said it swung to profit in 2018 due to a more than doubling of finance income and a much smaller impairment of assets than taken the year before.
The oil and gas production and appraisal company posted a EUR10.5 million profit for 2018, a sharp swing from its EUR71.3 million loss the year before.
The bulk of this was down to an impairment of assets. In 2018, the company only impaired EUR2.7 million while it incurred a EUR42.8 million impairment and write-off of exploration and evaluation assets in 2017.
Tipping San Leon the rest of the way into the black was EUR38.5 million of finance income, doubling the EUR16.2 million figure the year before. The company was further boosted by a EUR3.7 million gain on expected credit losses and a EUR2.0 million gain on fair value movements, neither of which were recorded in 2017.
Revenue from contracts with customers fell to EUR173,000 from EUR324,000. 2018 was the company's second full year of involvement with OML 18 onshore Nigeria and San Leon received EUR56.4 million from OML 18 production arrangement loan notes, versus just EUR34.3 million in 2017.
San Leon has a 9.7% stake in OML 18, which is operated by Eroton Exploration & Production Co Ltd.
"The company's finances and outlook have been transformed with income from the loan notes, while progress in late 2018 into 2019 on the operational and financial challenges faced by Eroton on OML 18, augur well for San Leon's future," said San Leon.
Shares in San Leon were down 1.0% at 38.67 pence on Thursday at midday.