LONDON (Alliance News) - Volga Gas PLC Tuesday said it swung to a profit in its first half as the company increased sales on further production capacity, and drastically lowered exploration costs.
The oil-and-gas exploration-and-production company, with operations in Russia, said it made a pretax profit of USD4.2 million for the six months ended June 30 compared to a pretax loss of USD4.6 million in the previous year.
The company said its sales increased 16% to USD15.4 million from USD13.3 million as the company achieved its key goal of having three gas fields on full-time production and achieved results from an upgrade in October 2012.
Volga's overall production was up 28%, to 2,550 barrels of oil equivalent per day from 1,990 barrels, and the company estimates its total production capacity from its existing wells at 20 million cubic feet per day of gas and 2,000 barrels of oil and condensate per day, a total of 5,300 barrels of oil equivalent per day.
The company also lowered its exploration expenses to USD28,000 from USD7.4 million and lowered administrative expenses to USD2.4 million from USD2.8 million, leading to an operating profit of USD4.3 million.
"The remaining stages of the plant upgrade are close to completion, and pending receipt of the necessary authorization, we expect to more than double gas and condensate production from our existing wells. This would take the group's total production to over 4,000 boepd," Chief Executive Mikhail Ivanov said in a statement.
Volga Gas shares were up 2.60 pence, or 3.0% to 88.60 pence Tuesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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