Revenue and earnings fall in first half for iGas
By Josh White
Date: Tuesday 22 Sep 2020
(Sharecast News) - Onshore oil and gas exploration and production company iGas Energy reported revenues of £10.5m for its first half on Tuesday, falling from £21.2m year-on-year.
The AIM-traded firm's adjusted EBITDA slid to £2.2m from £7.7m, as its swung to a loss from continuing activities of £30m, from a profit of £0.8m in the first half of 2019.
Operating cash flow before working capital movements was £1.9m for the six months ended 30 June, down from £8.7m year-on-year.
Net debt excluding capitalised fees grew to £11.2m from £5.9m, while cash and cash equivalents fell to £2.6m from £14.4m.
On the operational front, production averaged around 1,940 barrels of oil equivalent per day in the first half of 2020, down from 2,360 barrels of oil equivalent per day a year earlier, which the board said was primarily due to its decision to shut-in sites, to augment cash flow, given the low oil prices in the second quarter and Covid-19-related supply chain interruptions.
Five fields remained shut in, with the company continuing to keep them under review.
It said it was still expecting average net production for the year to be within the 1,850 to 2,050 barrels of oil equivalent per day range, with underlying cash operating costs per barrel of oil equivalent anticipated to be $34.
The company continued to progress projects in its core conventional business, which it said had the potential to add "significant value" to the firm and its shareholders.
Those included production uplift opportunities, such as water injection at Scampton North and Welton, and in wellbore production optimisation projects.
"It has been an incredibly challenging period for the business and a worrying and difficult time for all our employees coping with the Covid-19 pandemic and with the collapse in commodity prices, continued market volatility and the uncertainty that persists," said chief executive officer Stephen Bowler.
"It is testament to the resilience of our workforce that in spite of this, we have continued to achieve solid results in our production business, delivered the Scampton Waterflood project on budget and schedule and completed a significant transaction with the acquisition of the UK geothermal developer, GT Energy."
Bowler said its core conventional business was the driver of its future diversification, adding that iGas would continue to exploit the potential that existed in its core assets and ensure it continued to invest to protect that business as oil prices improved.
"We will also consider other new technologies that complement our existing business, as we move forward."
At 0803 BST, shares in iGas Energy were up 1.48% at 12p.
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