Forum Energy shares plummet on net loss

UK oil and gas company Forum Energy reported a 'significant' net loss for 2012 following the write-down of its Service Contract 40 (SC40) which includes the Libertad and Maya fields.

UK oil and gas company Forum Energy reported a 'significant' net loss for 2012 following the write-down of its Service Contract 40 (SC40) which includes the Libertad and Maya fields.

The group posted an annual net loss of $1.0m, before impairment charges of $25.36m in relation to SC40, down from a profit of $3.4m the year before.

Revenues fell 64.5% to $4.5m during the period, compared to $12.7m in 2011.

Loans payable at year end of $15m were due to Philex Mining Corporation and further funds will be required to cover minimum spend requirements and overheads of the next 12 months.

Aside from the write-down of SC40, the company was hit by territorial disputes between the Philippine and Chinese government. It meant the group was unable to deploy vessels to drill at its Service Contract 72 (SC72), an 8,800km2 offshore petroleum licence situated west of Palawan Island in the West Philippine Sea.

"Whilst our net loss this year was significant, this predominantly related to our recognition of the need to revalue our non-core assets at SC40, following receipt of a new independent report on resource estimates," Executive Chairman, Robin Nicholson, said.

"We remain focused on our key asset, SC72, and on our goal of establishing the commerciality of the potential hydrocarbon resources within the SC72 Concession."

Shares plunged 11.27% to 63.00p at 15:00 Wednesday.

RD

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