Wednesday March 19, 01:15 PM
Nautical sunk by exploration write-offs
LONDON (ShareCast) - Exploration write-offs relating primarily to the unsuccessful Mermaid well contributed to a six-fold increase in pre-tax losses at oil explorer Nautical Petroleum (LSE: NPE.L
- news) . The company's loss before tax for the six months to 31 December 2007 widened to £4.45m from £0.73m in the corresponding period of 2006, after the company took a £3.24m hit on exploration costs. Administrative costs rose from £0.78m to £1.53m, reflecting an increase in activity. The company took heart from the fact that the company's £20m fund raising exercise in October 2007 was oversubscribed. The funds will enable the company to accelerate its programme of appraisal and exploration. A spate of transactions negotiated by Nautical during the second half of 2007 enabled the company to reduce its share of appraisal drilling costs at the Kraken prospect while retaining a 45% interest. The company said that indications are that there could be considerably more oil in place at the Kraken accumulation than originally envisaged, while the higher API gravity and lower viscosity should increase recovery factors and achieve a higher price per barrel.
"Our drilling programme has confirmed further resource potential at Kraken which underpins the value of our portfolio," said chief executive officer Steve Jenkins.
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