LONDON (Alliance News) - Red Emperor Resources NL Monday said its pretax loss for the first half of the fiscal year significantly widened on the back of a substantial write off against its joint venture in Somalia.
The oil and gas exploration company reported a pretax loss of USD15.3 million for the six months ended December 31, significantly wider than the USD307,914 loss recorded a year earlier after the company recorded a substantial exploration write off against its joint venture in Puntland, part of Somalia.
Red Emperor took a USD15.2 million write off against the joint venture after the Somalian federal government "hardened its position with regards to the requirement of contracts" which led Red Emperor to reduce its presence in the area. The company said it will refrain from any operational activity and associated expenditures pending a resolution of the political situation and the legitimacy of oil concession contracts, it said in a statement.
"Given the considerable efforts taken by the joint venture to date in Puntland, the joint venture has requested a two-year extension to the current exploration period from the government of Puntland to allow time for these political challenges to be resolved," said Red Emperor.
"As a result the directors are of the view that exploration and evaluation expenditure should be written down to nil," it added.
At the end of the period, Red Emperor reported a cash balance of USD9.5 million.
Red Emperor shares were down 8.9% to 2.35 pence per share on Monday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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