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Exillon Energy plc (LSE:EXI) blames non-cash foreign exchange gains and write-offs from its assets that resulted in a negative bottom line for the first six months ending on 30th June 2012.
The Russian-focussed independent oil producer said it was not able to earn foreign exchange gains as it did in 2011 and had to deduct depreciation from its assets, thus resulting in a loss of US$1.7 million, compared to a profit of US$5.9 million for the same period a year ago.
Elsewhere, nonetheless, production and revenue are at their best performance. Oil production, according to Exillon, rose 48% to 2.1 million barrels and revenue jumped 58% to US$140 million for the comparable period.
However, because of the increased production, the London-listed firm posted US$8.2 million in depreciation, depletion, and amortisation cost as its probable and proven reserves and other assets had to be devalued.
Exillon said it is confident they will be able to achieve 17,000 barrels per day production by the end of 2012. In the last six months, the company successfully drilled five wells, all flowing naturally without the use of pumps and three wells are being drilled and expected to add capacity.
“Operationally we have seen excellent results from our drilling programme this year,” Exillon’s Chief Executive, Mark Martin, stated.
A new strategy – drilling at a 60 degrees angle – was adopted by the company and proved to be successful, resulting in double net pay.
On the financial side, Exillon said their cash position is strong, with cash of US$138.5 million and debt of US$100.2 million, for a net cash position of US$38.3 million, following a longer-term lower-interest loan provided by Credit Suisse.
This September, Exillon will be hosting a roadshow for investors and analysts and will present the medium-term plans of the company.
Shares moved slightly upwards by 0.8% to 133.50 pence by 10:40 AM GMT, following the news, with only about 110,000 shares traded.
Company Spotlight
Exillon Enerty plc is an oil producer holding assets in the Timan-Pechora and West Siberia regions of the Russian Federation. In 2011, the company produced over 3.2 million barrels of oil but reported a loss of US$10 million for that financial year.
Shares are listed on the main market of the London Stock Exchange.
