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LONDON (Alliance News) - Sound Energy PLC on Tuesday said its loss swelled significantly in 2015 as costs increased and the level of exceptional items rose as the company continues to progress its onshore gas assets across Italy and Morocco.
The oil and gas firm said its pretax loss ballooned to GBP18.3 million in 2015 from the GBP4.9 million loss in 2014, as the majority of its costs rose during the year.
The company booked GBP6.3 million worth of impairments in the year compared to only GBP723,000 last year whilst exploration expenditure soared to GBP5.8 million from only GBP74,000 in 2014. Administrative costs also rose to GBP3.2 million from GBP2.8 million.
Sound Energy also saw its foreign exchange loss widen to GBP1.4 million from a GBP661,000 loss whilst interest payments increased to GBP1.9 million from GBP1.0 million a year earlier.
Sound Energy does generate some revenue from its two producing fields, but this fell to GBP859,000 from GBP983,000 last year.
"Despite the challenging sector backdrop and a disappointing result so far at Nervesa, Sound Energy's high quality partnerships, significant cash balance and strong management team position us well for continued counter-cyclical growth. We move into a very busy 2016 in a very robust position, looking to generate value through the drill bit and pursuing selective opportunities to complement our portfolio. We are now just a few weeks away from the result at our first strategic play," said Chief Executive James Parsons.
Sound Energy acquired a 55% stake in the Tendrara licence onshore Moroccco during the year and is currently drilling the site.
In a separate statement Tuesday, Sound Energy said the Tendrara well that is currently being drilled has now reached the third and final casing point at a vertical depth of 2,475.0 metres. Sound plans to continue drilling down a further 50.0 metres to reach the target reservoir.
The company introduced oilfield services giant Schlumberger as a strategic partner on Tendrara and other assets in 2015.
Sound Energy also is in the process of increasing its stake in the Siki Moktar licenses in Morocco, where it believes a near term production opportunity lies.
In Italy, Sound Energy has recently secured permission to drill the Badile prospect this month.
Cash at the end of 2015 stood at GBP15.2 million compared to GBP12.6 million at the end of 2014.
Sound Energy shares were up 6.9% to 17.38 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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