ENP Newswire -
Release date- 27062014 -
Total production at Arcticneft reached 250,426 barrels (2012: 250,394 barrels).
Total production at Petrosakh reached 470,415 barrels (2012: 487,810 barrels).
Current daily production at Arcticneft is 680 BOPD - slightly lower than an average of 686 BOPD for the twelve months ended
Current daily production at Petrosakh is 1,168 BOPD compared with an average of 1,289 BOPD for the twelve months ended
In 2013 gross profit improved by 39% to
Without the foreign currency loss
EBITDA increased to
The Company continued to improve its net working capital position with positive net working capital on
Successful implementation of cost reduction program in the previous periods and effective cost management in 2013 resulted in 8% decrease in cost of sales.
Significant improvement in net cash generated from operating activities allowed the Company to pay the outstanding interest amount of
Post-period end and outlook
The annual planned tanker shipment for export from Arcticneft to Petraco is expected in October /
The Company has appointed a new Chief Geologist, who has undertaken reviews of both Petrosakh and Articneft. As a result, the Company believes that it will be possible to increase daily incremental production, after the successful implementation of this plan, by 6-7%, offsetting some of the decline in production last year.
At Articneft, the Company will commence a programme of re-entering existing wells which should allow better recovery at marginal incremental cost, instead of side tracking, which had been the Company's intention. Management in geological and production functions at both Petrosakh and Arcticneft will be reinforced with new hires, and all drilling activity will be contracted out to third party service providers, the selection of which is underway.
During the 1st quarter of 2014 the Company performed a series of tests of catalytic equipment for potential instalment in Petrosakh. Preliminary results show that the equipment will allow an increase in the yield of certain light oil products from 20% to 60%. During the second part of the year the Company will evaluate offers of potential providers of equipment in order to make a final decision.
Recent works on well 112 at Petrosakh have been suspended due to prolonged and problematic drilling and unacceptable results to date. At present the near-term drilling program is being evaluated.
Before year-end the Company is expecting to issue a new reserve assessment report prepared by Miller and Lents, as well as a reserve report made in accordance with Russian standards.
The management has increased its activity in the M&A field and is evaluating a number of potential assets and licenses that may be of interest either in the form of a merger, acquisition, joint venture or a farm-out, and/or a preceding or unrelated divestiture of an existing asset.
Both issues have taken their toll, in time and resources and required the full effort of the Board and management (in the latter part of 2013 and first quarter of 2014) in order to be resolved.
The Board received overwhelming support from its shareholders at the EGM, and the ill-driven attempt to take over the management of the Company with detrimental consequences to all the shareholders had been fended off.
The Board reiterates that it believes that the ADRA is a forgery, that the Company has no legal obligation whatsoever in this regard, and has initiated legal action and a criminal investigation of the ADRA and V. Rovneiko in
For the first time in many years the Company became debt free and was able to fully leverage its existing asset base. This enabled us to proceed with our plans to increase production at both of our assets and improve net backs at Petrosakh. We anticipate continued improvements in EBITDA which will allow us to consider farm-ins and acquisitions, as part of a controlled M & A strategy.
We are also pleased to have solidified our shareholder base and strengthened the Board with two new non-executive directors who are actively assisting management in pursuing new ways to grow the Company.'
The annual report and accounts for the year ended
Chief Executive Officer
Chief Financial Officer
Tel: +7 495 795 0300
Tel: +44 (0) 20 3328 5656
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