LONDON (Alliance News) - Spitfire Oil Ltd said Monday that it has become "far more rigorous" in analysing potential projects in light of the fall in oil and gas prices in 2014, as it posted a widened pretax loss for its first half.
For the half year to end-December, the Western Australia based oil producer reported a pretax loss of AUD183,983, widened from a pretax loss of AUD116,964 a year before, as its income declined to AUD44,272 from AUD84,782, and its corporate expenses increased. This income consisted of benefits from interest receipts, Spitfire said.
Spitfire does not produce revenue. Last December the company announced that its only project, the Salmon Gums Ignite project in Western Australia, will remain suspended until October 2015 due to the weaker oil prices and its inability to develop the project at a low capital cost.
The company said Monday that the oil and gas industry was "severely impact" by the collapse in prices, and projects it had found "economically compelling" at higher oil and gas prices now "make little economic sense at current commodity prices and would fail to attract funding for acquisition or development".
"In such an environment, the company has become far more rigorous in its analysis of potential projects and companies in the hope of acquiring more robust assets capable of being developed in this depressed market and in this commodity price range. The challenge is significant," said Chairman Mladen Ninkov in a statement.
Shares in Spitfire are trading down 4.1% at 4.31 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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