Nu-Oil & Gas Interim Loss Widens As It Pursues Marginal Field Strategy

LONDON (Alliance News) - Nu-Oil & Gas PLC said on Thursday its loss widened in the first half of its financial year, largely due to the costs of the continued implementation of its marginal field strategy.

For the six months to December 31, the company's pretax loss widened to GBP916,000 from GBP421,000 a year earlier. Nu-Oil generated no revenue in either period.

The main area of expense over the period was spending on its marginal field strategy, the Nu-Oil said, adding it has identified and reviewed a large number of marginal fields, working with consortium members to convert a number of these "undervalued" opportunities into commercial assets.

"Such work is complex, and the company will realise the value when this investment results in the acquisition of projects in which investors can have a high degree of confidence that good returns, through each project's life, will be achieved," it said.

Canadian operations have been reduced to a minimum, Nu-Oil said, primarily through the agreements with PVF Energy Services and G2 Energy Inc, under which direct costs of Nu-Oil's Canadian assets are covered by those parties. Directly incurred costs in Canada for the period were GBP11,000.

"Nu-Oil has seen a strong turnaround over the last 18 months. The company's general financial position is steadily improving, activity continues on its assets in western Newfoundland, on which we wait for the results of the production test which is expected to commence shortly," said Chief Executive Nigel Burton.

"The company has raised funds which it anticipates will allow it to conduct vital work in marginal field acquisition and we look forward to being able to share the results of that work in due course," Burton said.

Shares in the company were down 0.5% at 1.09 pence on Thursday.