Sterling Energy posts fall in first quarter profits

Sterling Energy reported a fall in first quarter profits Friday reflecting a drop in revenues from oil lifted from the Chinguetti field in Mauritania, lower prices and higher operating costs.

Sterling Energy reported a fall in first quarter profits Friday reflecting a drop in revenues from oil lifted from the Chinguetti field in Mauritania, lower prices and higher operating costs.

Profit after tax in the first three months of the year came to $0.1m, down from $3.1m a year earlier.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell to $2.4m from $4.9m.

The company said profits took a hit from a rise in depletion costs as a result of higher production during the period. Production, net to sterling from the Chinguetti field, averaged 568 barrels of oil per day (bopd), compared to 401 bopd the previous year.

Results were also affected by a lower oil inventory valuation and a reduction in the reporting currency value working capital deposits held in pounds sterling following a weakening of the US dollar exchange rate.

Cash balances at the end of the quarter were $117.0m, including $1.4m of partner funds, down from the prior year's cash balance of $120.3m, including $1.7m partner funds.

"The company has large working interests in high materiality exploration and is well placed to build the portfolio using existing resources," said Chief Executive, Angus MacAskill.

"Progress continues to be made towards the drilling of exploration wells in our blocks in Cameroon and Madagascar, and we remain focused on acquiring only those ventures we believe will deliver real growth and value for our shareholders."

Shares fell 3.07% to 35.50p at 15:52 Friday.

RD

Recommended

Share tips of the week – 21 January
Share tips

Share tips of the week – 21 January

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
21 Jan 2022
Seven cheap defence stocks to buy now
Share tips

Seven cheap defence stocks to buy now

We’ve got used to a world without war between major powers, but that era is coming to an end as Russia threatens Ukraine and China eyes Taiwan. Buy de…
21 Jan 2022
Invest in VCTs: tax-free investments set to break records
Investment strategy

Invest in VCTs: tax-free investments set to break records

Generous tax breaks make VCTs – venture capital funds – an attractive supplement to pensions.
21 Jan 2022
HubSpot: a tech stock set to tumble
Trading

HubSpot: a tech stock set to tumble

US tech stocks have had a fantastic couple of years. But this year is unlikely to be so bullish for high-fliers that can’t turn big profits.
18 Jan 2022

Most Popular

Ask for a pay rise – everyone else is
Inflation

Ask for a pay rise – everyone else is

As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why yo…
17 Jan 2022
Temple Bar’s Ian Lance and Nick Purves: the essence of value investing
Investment strategy

Temple Bar’s Ian Lance and Nick Purves: the essence of value investing

Ian Lance and Nick Purves of the Temple Bar investment trust explain the essence of “value investing” – buying something for less than its intrinsic v…
14 Jan 2022
Interest rates might rise faster than expected – what does that mean for your money?
Global Economy

Interest rates might rise faster than expected – what does that mean for your money?

The idea that the US Federal Reserve could raise interest rates much earlier than anticipated has upset the markets. John Stepek explains why, and wha…
6 Jan 2022