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Trapoil widens annual losses, blames impairments

Trapoil on Thursday posted an annual loss as the oil and gas explorer was hit by impairment charges from unsuccessful licences in the UK.

Trapoil on Thursday posted an annual loss as the oil and gas explorer was hit by impairment charges from unsuccessful licences in the UK.

The group widened its 2012 loss before tax to £10.9m from the previous year's £4.5m, reflecting a non-cash impairment charge of £6.8m after relinquishing Inverewe, Lytham and Sienna licences and the Magnolia exploration well in the UK.

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Technical and employment costs of developing projects to the drilling stage also impacted results.

Nevertheless, Trapoil generated £1.7m revenue, compared to £0.8m in 2011, driven by partnerships with Suncor and Noreco and production income from the Lybster field in the North Sea. First oil production of 50,027 barrels was achieved from Lybster.

Cost of sales of £9.8m were incurred in supporting assets including Lybster, up from £0.8m the year before.

"In a very challenging industry and market environment, Trapoil has successfully established strong foundations for further growth via the sizeable corporate, asset and financing transactions executed since its IPO [initial public offering]," said Chief Executive Officer Mark Groves Gidney.

"We will endeavour to commercialise our existing discoveries and continue to build exciting exploration programmes as we look forward to the further opportunities ahead."

Shares fell 3.51% to 13.75p at 11:06 Thursday.

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