Northern Russia-focused oil producer Exillon Energy has delayed its short-term output target whilst reporting that losses widened significantly in 2011 due to higher operating costs and selling expenses.
Shares edged lower (-0.04%) in early trading on Monday morning.
The company - which operates to two regions, West Siberia (WS) and Timan-Pechora (TP) - said average daily production rose by 90% from 4,656 barrels per day (bpd) in 2010 to 8,884bpd. In February 2012, average output rose to 11,584bpd.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
However, while the group previously expected to hit a production level of 17,000bpd by the end of the first half of the current year (June 2012), operational difficulties, including the slower-than-expected mobilisation of rigs, mean that the target will won't be achieved until the end of the year.
Pre-tax loss totalled $7.1m in 2011, compared to a loss of $3.7m the year before, on revenue that surged from $84.8m to $203.0m.
The increase in production over the year saw operating costs (excluding depreciation, depletion and amortisation) rise from $34.4m to $80.4m. Production costs were pushed higher by the growth of mineral extraction tax.
Selling expenses surged from $36.3m to $84.1m due to higher export duties and transportation services. Despite the increase, the total of these costs account for 41.4% of group revenue, down from 42.8% the year before. Administrative expenses also increased from $11.4m to $19m due to an increase in headcount.
Earnings before interest, tax, depreciation and amortisation rose by 314% from $4.7m to $19.5m.
During 2011, operating cash-flow jumped to $34.1m, compared with a negative operating cash-flow of $6.7m the year before.
"In 2012 we are planning to continue our drilling programme in Exillon WS and to significantly expand our drilling programme in Exillon TP," said Chief Executive Officer Mark Martin.
BC
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
