LONDON (Alliance News) - Victoria Oil & Gas Friday said its pretax losses widened in its full year as high costs related to the company moving from exploration into production hit its finances.
The oil and gas exploration and production company with operations in Cameroon said its pretax loss widened to USD15.9 million from USD7.7 million in the twelve months ended May 31.
The company posted its first revenues of USD6.9 million from its now-producing Logbaba gas and condensate field in Cameroon, through the sales of gas for industrial customers' thermal energy needs and the sale of condensate.
Victoria said its cost of sales were USD5.5 million, including a USD2.3 million depreciation, depletion and amortisation charge, which significantly offset its first revenues.
The company also said its administrative expenses increased to USD11.2 million from USD4.5 million as the company's increased operational focus has altered the operational structure of the company.
Victoria said it is currently implementing cost-cutting measures through a restructuring of the organisation in Cameroon. In the coming year, the company expects to see continued increases in revenue and decreases in operating costs per unit of production.
The company had said on October 10 that it has missed some of its development targets in Cameroon as its gas pipeline through Cameroon, which was scheduled to pass under the Wouri River in the fourth quarter of this year, has been held back by delays in the approval of its Environmental Impact Assessment.
The company also said the development of a cement plant, which will use 10MW of power, is being held back due to the pipeline delay and is now expected to be operational in the second quarter 2014.
Victoria Oil & Gas said that a cost-saving initiative, in which a 20MW temporary power station would be used to help convert under-utilised diesel to gas, could be online by late 2013 to offset some of the losses related to missed targets, depending on how government talks turn out.
In early trading Friday, Victoria shares were up 1.6% at 1.16 pence per share.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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