Nu-Oil losses widen, but board confident of future revenue

(Sharecast News) - Pre-revenue independent oil and gas company Nu-Oil issued its results for the year ended 30 June on Friday, reporting an increased loss from operations of £1.67m, widening from £1.46m in the prior year.The AIM-traded firm's finance costs remained in line with the prior year at £0.21m, with its loss before tax standing at £1.88m, compared to £1.67m a year earlier.Losses per share were smaller, however, at 0.1p compared to the 0.2p reported in the 2017 financial year, on both a basic and diluted basis.On the operational front, Nu-Oil said it was building a portfolio of stranded fields.It explained that it was expecting its continued focus on the identification and development of stranded and marginal fields through its investment in, and relationship with, Marginal Field Development Company (MFDevCo).Nu-Oil held a 50% interest in MFDevCo.The company's board said that marginal field strategy would seek to utilise innovative engineering solutions that reduced both capital and operational expenditure, and was redeployable to build a portfolio of low risk, highly appraised marginal assets.It said it was continuing to "actively seek" new assets in conjunction with MFDevCo.In Western Newfoundland, Nu-Oil noted that entered into a production sharing agreement with PVF Energy Services for PL2002-01 on 31 January 2017.The agreement reportedly provided for the firm to receive 50% of net revenue from production following the recovery of any costs incurred by PVF in performing its obligations.PVF had faced some challenges in developing operations on the licence, the board said, which had resulted in unexpected delays "hampering, but not halting" progress.The company, with PVF and others, was also apparently in discussion regarding wider regional rejuvenation plans, which it said would provide a "step change" in the portfolio interest as it currently stood.Nu-Oil had cash balances of £0.86m as at 30 June, up from £0.65m a year earlier.The board said the status of commercial discussions, its ability to raise capital and the company's cash position provided management with the confidence that the business model had the potential to allow the group to satisfy its liabilities and operate as a going concern.During the year, Nu-Oil raised £2.71m net through the issue of new ordinary shares.Looking ahead, the board said it had a "clear, focussed strategy" for commercialising stranded and marginal fields.It added that recent enquiries provided directors and management with confidence regarding the viability of the business model and provide confidence that the company could add further projects to its portfolio."The company has made progress on several projects this year and we are excited about the opportunities that lie ahead," said chief executive officer Nigel Burton."Activity has increased in MFDevCo and we look forward to updating the market as it acquires projects and concludes investigations into alternative marginal field commercialisation methods."I'd like to thank all stakeholders, in particular shareholders, for their support and we look forward to providing updates in 2019."