HURRICANE Energy, which hopes to develop the Lancaster oil field West of Shetland, has recorded increased first half losses but said it made good progress during the period.
Surrey-based Hurricane lost £7.3m after tax in the six months to June, compared with £5.9m in the same period last year.
Operating expenses increased to £4.9m from £4.1m.
Chief executive Robert Trice said Hurricane completed highly successful appraisal drilling on the Lancaster find it made in 2009 during the period.
This increased directors' confidence that a well on the field could produce 20,000 barrels oil equivalent per day.
Lancaster is estimated to contain 207 million barrels oil. It lies in an area of hard granite rock found below the sandstone reservoirs that have formed the basis for the majority of North Sea exploration.
Aim-listed Hurricane is reviewing the funding options for the possible development of the Lancaster find.
It had £37.9m cash and equivalents at June 30, enough to cover the remaining liabilities incurred during the recent Lancaster appraisal drilling.
However, Hurricane added: "Further funding will be required for future exploration and appraisal activities on the Group's licences."
The results announcement underlines the cost of drilling off Shetland.
The company spent £35.5m drilling an appraisal well on Lancaster in the first half, compared with a budgeted cost of £39.4m.
Hurricane classed £177m of spending on exploration and evaluation activity as an asset on its balance sheet at June 30, up from £137.7m at December 31.
The company raised £17m from investors in February.
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