LONDON (Alliance News) - Victoria Oil and Gas PLC Friday said it swung to a significant pretax loss in the first half of the year on the back of a large impairment against its Russian assets, although revenue almost doubled due to higher condensate sales from the Logbaba gas and condensate field in Cameroon.
For the six months ended November 30, the company reported revenue of USD11.6 million, almost double the USD6.0 million reported in the first half of 2013, driven by increased condensate sales from the Logbaba field.
Earnings before interest, tax, depreciation and amortization totalled USD1.4 million, a rise from USD200,000 a year earlier. But Victoria Oil then reported a write down of its Russian West Medvezhye asset of USD49.8 million. This led to a significant pretax loss of USD51.7 million, compared with a USD2.5 million profit in the first half of 2013.
"The impairment provision was made as it was considered that the political issues in Russia, combined with the weakness in the world price of oil, make realising the carrying value of the asset through the current marketing process significantly more difficult," said the company.
Gas sales from the Logbada gas field totalled 716 million standard cubic feet of gas during the period, down from 809 million a year earlier, offset by condensate sales increasing to 13,221 barrels from only 5,335 barrels.
"While gas prices remained unchanged throughout the period because of the fixed price contracts we have with our customers, the global downturn in oil prices has negatively affected the condensate sales price, as this is linked directly to the price of Brent crude," it said.
Victoria Oil shares were down 2.1% to 58.75 pence per share on Friday afternoon.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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