LONDON (Alliance News) - Global Petroleum Ltd Wednesday said its pretax loss widened during the first half of its financial year after cost reductions were offset by a significant foreign exchange loss and higher exploration expenses.
For the six months ended December 31, the upstream oil and gas exploration company reported a wider pretax loss of USD2.3 million from a USD1.5 million loss a year earlier on the back of a foreign exchange loss and higher exploration expenditure.
The company operates in Africa and the Mediterranean, and Global Petroleum said it moved its accounting currency from Australian dollars to US dollars in July as its expenditures have "become increasingly weighted in US dollars", it said.
Global Petroleum does not currently generate any revenue, and although it reduced its administrative, employee and business development expenses during the period, it was offset by a USD521,633 loss on foreign exchange and USD179,434 in exploration expenses.
A year earlier, the company recorded a gain of USD6,149 on foreign exchange and no exploration expenses.
It pretax profit was also hit by a reduction in finance income, which only totalled USD46,344 in the first half of the year compared to USD303,666 a year earlier.
At the end of 2014, Global Petroleum reported a cash balance of USD14.2 million with no debt.
"Many of our peers find themselves in financial difficulties, having utilised their available funds in high-risk exploration, which the statistics show has been largely unsuccessful over the last two to three years. The fact that we have maintained our relative financial strength in relation to our peers puts us in a good position to profit from the new market realities, whether by asset acquisition or via corporate combination," said Chairman John van der Welle.
Global Petroleum shares were up 5.7% to 2.24 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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Global Petroleum (GBP)