(Alliance News) - Phoenix Global Resources PLC on Monday reported disappointing full-year financial results after the pandemic wreaked havoc on its normal trading patterns.
The oil and gas exploration and production firm said revenue in 2020 dropped by more than half to USD54.0 million from USD129.4 million in 2019. The fall in revenue was driven by the shut-in of production in Argentina due to Covid-19, a reduction in oil prices, and lower sales volumes year-on-year.
Pretax loss saw a similar deterioration, widening substantially to GBP235.0 million from GBP134.8 million.
Phoenix was forced to shut-down all production in April 2020 due to the coronavirus and took steps to reduce costs in all areas of the business, it said. It successfully cut annual general and administration costs by more than 50% and restructured field contracts to reposition the firm's cost base. Phoenix operates in Argentina's Vaca Muerta shale formation.
While acknowledging demand and supply side disruption, Phoenix Global said it is now better able to leverage the situation and continue to "reduce and optimise its normalised production cost base".
"The directors believe these cost reduction actions mean the company is in a better position to produce oil economically at lower oil prices with a positive contribution to cash flow at normalised production levels, which will allow the company to focus on the continued development of its unconventional assets," Phoenix Global commented.
Shares in Phoenix Global Resources were down 2.2% on Monday at 4.50 pence in London.
By Will Paige; willpaige@alliancenews.com
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