North Sea-focused oil and gas firm Trap Oil (LON:TRAP) generated positive cash flow from its investing activities in 2013.
The group, which has a portfolio of assets comprising a mixture of carried and paying interests, saw cash reserves increase by just over £7mln to £16.4mln by the end of 2013, helped by a strong revenue stream from its 15% equity interest in the Athena oil field.
At the current estimated reduced production rate, Trap expects to continue to generate just under £1mln per month from Athena, based on an oil price of around US$105 a barrel.
The group is very focused on managing its cash position in order to fund future drilling and, in response to increased costs in the running of the business, management has agreed to a 20% pay cut in 2014, while staff numbers have been cut back.
On the profit & loss account, things were complicated by a £9.4mln charge relating to the disposal of assets to Caithness Oil. Even with this write-down, the loss before tax narrowed to £10.3mln from £10.9mln in 2012.
Revenues shot up to £30.3mln from £1.7mln, reflecting the contribution from the company’s assets on the UK continental shelf.
“We will proceed to execute our planned drilling programme following partner and rig availability confirmation, thereby seeking to maximise the potential value of our carried interests. Preserving our cash reserves for existing assets is a priority, as is the focus on any new venture to drill or add clear value in the short term,” said Mark Groves Gidney, Trap's chief executive officer.