(Alliance News) - Upland Resources Ltd on Friday posted a deeply widened annual loss after impairing the offshore Wick-1 exploration well in the North Sea after unsuccessful testing.
For its financial year ended June 30, the oil and gas company's pretax loss totalled GBP4.4 million - more than four times that of its GBP937,466 loss the year before.
This substantially higher loss resulted largely from a GBP3.4 million intangible asset impairment, with no such impairment reported the year before. This is the amount Upland has capitalised in relation to Wick-1, located in the North Sea's Inner Moray Firth area.
Upland explained that: "Unfortunately, the main Beatrice Sandstone target, though good quality, was water bearing and the well was plugged and abandoned." The firm is now focusing on its licence in Tunisia.
Upland partnered with Corallian Energy Ltd on Wick-1, with both holding a 40% interest, while Baron Oil PLC and Corfe Energy Ltd held a 15% and 5% interest respectively.
On October 7, following the end of Upland's year, former chief executive Steve Staley resigned immediately "for personal reasons" and was succeeded on an interim basis by Christopher Pitman.
"In the coming months, emphasis will be placed on de-risking the Tunisian Saouaf licence through re-processing the existing seismic with a view to designing a new 2D seismic acquisition programme," said Pitman.
"The Saouaf Permit area has been independently verified as holding substantial amounts of potentially recoverable gas and oil prospects that may prove to be transformational for the business. New 2D seismic data will allow definition of both leads and prospects for potential future drilling. During this process, it is anticipated that strategic investors will be found through a managed farm-out campaign," he added.
Pitman further noted that: "The company is also presently evaluating several significant opportunities in the Asia Pacific region which could enable Upland to access proven reserves. It is the belief of the management that local strategic partnerships in the Asian arena will provide game changing opportunities for growth by focussing on both late life producing assets and overlooked stranded discoveries."
Shares in Upland were up 0.3% at 1.58 pence in London on Friday.
By Anna Farley; email@example.com
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