LONDON (Alliance News) - UK Oil & Gas PLC on Friday reported an eight-fold rise in its annual pretax loss as expenses jumped in its race to achieve production from the Horse Hill field.
For the year ended September 30, the oil & gas exploration company posted a pretax loss of GBP16.7 million, significantly widened compared to GBP2.3 million a year ago.
"I am pleased to see the company is in a financially strong position with an exciting operational pathway to oil production," Chair Allen Howard said.
"This year the management has been focused on advancing all its assets and importantly changing its listed status from an investment to an operating company. This is a critical move and allows UKOG to control its own destiny by being able to manage and operate its assets by implementing its strategic objectives."
The company generated marginal revenue of GBP225,000, slightly higher than last year's GBP207,000.
Operating expenses amounted to GBP3.8 million from GBP2.4 million a year ago, while GBP11.6 million in exploration write-offs versus nothing a year ago contributed to the bigger loss.
Looking ahead, Chief Executive Officer Stephen Sanderson said: "The prospect of free cash flow and associated proven and probable reserves from Horse Hill in the next financial year, places the company in a strong position to deliver its ambitious 2020 drilling plans and the associated growth. Horse Hill can solidly underpin our future."
Also on Friday, UK Oil & Gas and its partner Alba Mineral Resources PLC said that aggregate test production from the Horse Hill field's Portland reservoir now has exceeded 10,000 barrels.
Drilling of the HH-2 and HH-1z Kimmeridge appraisal/production wells is targeted to start in spring 2019, the firms added.
UK Oil & Gas holds a 50.635% interest in the Horse Hill well, while Alba owns a 11.765% interest.
Uk Oil & Gas shares were trading down 1.4% at 1.28 pence each while Alba Mineral shares were down 4.0% at 0.24p.