LONDON (Alliance News) - IGas Energy PLC Wednesday said it swung to a pretax profit in its full year due to higher revenue and lower net finance costs, as the company moved towards fracking operations in the UK.
The UK-focused shale gas player said it swung to a pretax profit of GBP2.3 million for the twelve months ended March 31 from a pretax loss of GBP6.0 million the previous year. Revenue increased 11% to GBP75.9 million from GBP68.3 million.
The company said revenues increased as its production rates improved to 1.0 million barrels of oil equivalent from 900,000 barrels of oil equivalent.
AIM-listed IGas currently produces about 3,000 barrels of oil and gas equivalent per day from 110 sites across North West England, the East Midlands, the Weald Basin in Southern England, and Northern Scotland. It operates the UK's only coal-bed methane pilot site at Warrington in the North West and is appraising and exploring its North West and East Midlands acreage for its shale and coal-bed methane potential.
IGas said its finance income increased to GBP7.9 million from GBP26,000, and its finance costs reduced to GBP20.4 million from GBP27.9 million, improving the company's profitability.
However, the company did note that its cost of sales increased 26% to GBP47.9 million from GBP38.0 million during the period, as it significantly widened operations and developed its strategy.
During the year, IGas completed a farm-out agreement with Total E&P UK Ltd at the PEDL139/140 licence, completed new exploration wells along with seismic testing, and acquired North Sea oil producer Caithness Oil Ltd for GBP7.9 million.
In May, the company announced plans to acquire Dart Energy Ltd for GBP117.1 million, a deal that will create a company with the largest area in the UK licensed for shale gas fracking.
IGas said it ended the year period with GBP28.3 million of cash and cash equivalents, net debt of GBP80.4 million, and net current assets of GBP74.3 million.
IGas Energy shares were up 1.6% to 130.00 pence on Wednesday.