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Iona Energy focusing on cost controls as 2014 loss widens

Published: 20:10 29 Apr 2015 AEST

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North Sea focused Iona Energy (CVE:INA) saw losses widen largely due to the oil price drop and export restrictions from its Huntingdon field, it told investors in final results.

But its Orlando development remains on track for first production in the fourth quarter of 2016.

Iona, which has a new management team and a renewed focus to manage costs, holds four oil assets - Huntington, Orlando, Kells, and West Wick and a  natural gas project - Trent & Tyne.

Huntington, in block 22/14b of the North Sea and around 230km east of Aberdeen, had been operating under gas export rate restrictions since October, meaning production has been reduced.

In the year to Dec 31 last year, 2014, group revenues came in at  US$90.5 million compared to US$65.5 million in 2013 and adjusted underlying earnings was US$43.7 million (2013: US$47.9 million).

The loss after tax was US$119.5mln for 2014 compared to a loss of $29.5 million loss following full impairment of Trent & Tyne (US$31.2 million) and impairment of Huntington asset ($88.9 million) and associated goodwill ($14.1 million) during 2014.

As reported previously, the group's lenders, last  month, have agreed to amend the terms of of the group's debt aimed at providing more flexibility to develop Orlando.

Last year overall, average net production was 2,229 barrels of oil equivalent per day (boepd) with average production of 13,472 boepd (gross) at Huntingdon, with 2,021 boepd (net to the company's 15% working interest).

Trent & Tyne 2014 average production was 1,043 boepd (gross), 209 boepd (net to the Company's 20% working interest).

Chief executive  Tom Reynolds said: "Under the company's new leadership team significant progress has been made to strengthen the business in a period where macro conditions are adversely affecting the entire sector. 

"The bond restructuring is underway, G&A costs have been materially reduced, appropriate hedging is in place for 2015 and key agreements were signed to progress the Orlando development. 

"With resumption of normal service at CATS the Huntington field is now producing at unrestricted rates representing a more stable and predictable cashflow."

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