Genel Energy's losses widened due to writedowns and lower production, but its shares lifted more than eight per cent as it noted "clear reasons for optimism going forward".
For the year to the end of December, the oil producer, which works in the Kurdistan region of Iraq and is chaired by former BP boss Tony Hayward, produced 53,300 barrels of oil per day (bopd) last year down from 84,900 bopd in 2015.
The firm's operating loss grew to $1.22bn (£983m) compared with $1.1bn the previous year due to $779m of writedowns in relation to exploration assets.
Revenue fell to $190.7m from $343.9m the previous year, missing its lowered target of $200m to $230m for 2016.
Genel's share price increased 8.02 per cent to 62.92p in morning trading.
Why it's interesting
Shares in Genel plunged more than 20 per cent on Tuesday after it announced its Taq Taq oil field reserves had been cut by around 66 per cent. Genel also suspended the field's full-year production target of 35,000-43,000 barrels per day (bpd).
2015 was a tough year for Genel and the oil industry as a whole, and the firm said its resilience was tested again in 2016 while oil prices started their recovery.
Genel's work relies on export payments from the Kurdistan Regional Government (KRG), which was hit by lower oil prices, causing analysts to doubt its reliability.
After a "disappointing" performance in 2016, the company said it is "focused on a strategy to reverse this trend" with the opportunities available in its portfolio, like its Miran and Bina Bawi fields.
What Genel said
Chief executive Murat Ozgul said: "While 2016 was a challenging year at Taq Taq, Tawke continues to produce at a stable level, and regular payments for our oil production in the Kurdistan Region of Iraq helped generate free cash flow in the year. The improved financial position of the Kurdistan Regional Government bodes well for a continuation of these payments.
"We move into 2017 with clear priorities: maximising the value of our oil assets, accelerating the recovery of the receivable, and building on the increased momentum in the development of our gas assets."
What analysts said
Analysts at RBC Capital Markets anticipated a "mute" response to today's full year results following investors' reactions to Tuesday's reserves downgrade: "The financials had been pre-announced and, with the addition of Tuesday’s $180m impairment charge, the numbers are in line with our expectations."