IGas Energy Annual Loss Narrows Significantly Ahead Of Busy Period

LONDON (Alliance News) - Hydrocarbon producer IGas Energy PLC on Wednesday posted a significantly narrowed loss for 2017, well ahead of its revenue growth, as it moves into a "busy" period of operations.

IGas has a number of operations in the UK, including producing assets in Scotland and the Weald basin and exploration work in the north-west of England and the East Midlands.

IGas' pretax loss in 2017 was GBP3.2 million, well below the GBP44.8 million recorded in 2016. The company's revenue increased to GBP35.8 million from 2016's GBP30.5 million.

The firm attributed the rise in revenue mainly due to higher oil prices, offset slightly by a stronger sterling to US dollar exchange rate and marginally lower production.

The narrowed loss was due to a significant decrease in finance costs to GBP6.4 million in 2017 from GBP29.1 million in 2016, with the previous year including a large foreign exchange loss and twice as high interest payments.

Production averaged 2,335 barrels of oil equivalent in 2017 compared to 2,355 in 2016. This is guided to be between 2,300 boepd and 2,400 boepd in 2018. Operating costs in 2017 were USD28.20 per barrel, slightly lower than 2016's USD28.80, and in 2018 this is expected to be USD32.50 per barrel on currency exchange rates.

IGas said given better prices and an improved cash position, it, like the rest of the energy industry, can spend more time looking at exploration and appraisals in its existing assets, and it is now approaching a period of increased activity across its assets.

Looking forward, IGas is cautious about the macro-economic outlook but is confident anticipated free operating cash flow will give it a solid platform for progress.

Chief Executive Stephen Bowler said: "There is also a significant level of activity onshore UK, and over the next 12 months, the industry is expected to have a number of operators either drilling or flowing wells."

"As momentum builds across both our business and the industry as a whole, we look forward to the future with excitement as security of energy supply and diversification of the UK energy mix becomes ever more important," Bowler added.

Shares were up 2.0% on Wednesday at 78.50 pence each.