Leni Oil and Gas widens annual losses as production falls

Leni Gas and Oil (LGO) reported a fall in annual production as a result of a weak performance in the Gulf of Mexico and the sale of properties in the US.

Production in the year to December 31st 2012 came to 58,450 barrels of oil equivalent (boe), down from 64,650 boe a year earlier.

The group widened its pre-tax loss to £7.7m from £3.91m, attributable to the loss on the disposal of Gulf of Mexico and Malta assets.

Output in the Gulf of Mexico averaged 19 barrels of oil equivalent per day (boepd) up until the sale of producing properties. Net proceeds from the sale of leases totalled $2.0m.

The company ended the year with no further interests in the US.

LGO also offered its Spanish business for sale but failed to reach a deal with prospective buyers.

In October, LGO acquired the Goudron Field Incremental Production Contract with Petrotrin in south eastern Trinidad. The firm raised £2.4m in new share equity in September through the issue of 600m ordinary shares to purchase the field.

The well was producing more than 100 bopd by year end following workovers.

Contingent resources of over 60m barrels were identified at Goudron associated with a potential future water-flood project of secondary recovery.

"As expected 2012 was a transformational year for LGO with a planned major shift in emphasis on to growth in production and future value in Trinidad," said Chairman David Lenigas.

"The year also presented a number of major challenges as some of the expected merger and asset transactions failed to materialise and market support was poor. Nevertheless the board and I are delighted with the position we have now managed to obtain in the onshore Trinidad oil belt and we see this, supported by our position in Spain, as an exciting future for the company."

Looking ahead, the company will focus on developing proven reserves in the Goudron field, targeting the completion of drilling two new wells in 2013.

RD