Mediterranean Oil moves into profit

Mediterranean Oil and Gas (MOG) moved into the black in 2011 as the start of production at its Guendalina gas field gave a boost to revenues.

The group's revenue momentum is starting to build as it cranks up production of gas. In 2011, the firm produced around 17.6m standard cubic metres (scm) of gas, up 44% on 2010, largely due to the commencement of gas production at the Guendalina gas field in late October 2011.

The average gas sales price achieved during 2011 was €0.32/scm ($12.70 per thousand cubic feet), an improvement on 2010, when the average gas sales price was €0.28/scm ($10.70 per thousand cubic feet).

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Revenue in 2011 rose to €5.65m from €3.49m in 2010. Profit before tax was €2.83m, versus a loss of €7.78m the year before. Earnings per share totalled two cents, versus a loss per share of 20 cents in 2010.

As a result of the company's restructuring in May 2011, MOG's financial position was materially strengthened with £19.1m in new equity (post transaction expenses) being raised and the company being left free of debt. Cash and cash equivalent at the end of 2011 stood at €3.7m.

"The group is now in a strong financial and operational position, which will enable MOG to actively seek strategic growth opportunities while progressing its portfolio of production, development and exploration assets," said Chief Executive Officer, William Higgs.

The company is continuing to talk to the Italian government about the group's ability to progress the Ombrina Mare project off the coast of Italy, after the Italian government changed the rules on offshore developments in June 2010.

In addition, the company is also working with external legal counsel on the analysis and implementation of alternative courses of action as a contingency plan. In the meantime, work on the project remains suspended.

JH