UK Oil & Gas (Ukog), the company behind the Gatwick Gusher, has widened its losses – but the company is confident about opportunities over the coming months.
Ukog made a loss of £383,000 for the six months to 31 March, up from a £290,000 loss over the same period in 2014.
However the oil discovery group posted revenues of £200,000 after having sold 3,434 barrels of oil from its share of production from the Homdean and Avington oil fields in the Weald Basin.
It has cash and receivables of £8m, having raised £6m through a share placement earlier in June.
The company also has a $10m (£6.3m) debt facility with YA Global Master, enabling it to borrow more for further investment: the company has $9.6m available in this facility.
“Our strong balance sheet puts the company in an excellent position to benefit from the current oil price downturn and from the financial difficulties of some of our competitors.” Ukog said.
Why it's interesting:
It's been a hugely interesting six months for Ukog, which announced a major oil find in Horse Hill, near to Gatwick, prompting its shares to spike. However subsequent statements – including revisions of the estimates and acknowledgements that the oil may never be retrieved - have left investors scratching their heads
Ukog has recently linked up with two larger technical specialists – Nutech and Shlumberger – to help work on the Weald assets.
It is also planning to “thoroughly” investigate a “non-fracking related drilling based simulation” in its Oolite reservoirs and Kimmeridge.
“If successful these technologies have the potential to increase economic viability and potential returns from the company's entire Weald portfolio.”
Investors seemed to back the board: Ukog's share price was up more than 1.1 per cent at the open.
What they said
The board said it was “an exciting and key period for the company as it continues to maximise value from its existing investments and continues to seek additional opportunities to grow and add to its portfolio in the core Weald and Wessex Basin area”.
Ukog has pretty big plans for the next six months. It is planning a well flow test for its Upper Portland discovery and deeper Jurassic limestone zones; further studies of its Baxters Copse discovery; and appraising its Markwells Wood discovery.
Other plans include expanding its licence position in the UK onshore with additional exploration, development and production investments. The company has applied for an additional 200 km2 of onshore acreage on the Isle of Wight.