Exillon losses widen due to currency hits

City A.M. Reporter
EXILLON Energy said yesterday its full-year loss widened as the positive effects of increased production and higher crude prices were offset by a foreign exchange loss and a loss on disposal of non-current assets.

The Russia-focused oil producer also pushed back its expectation of achieving a production level of 17,000 barrels per day (bpd) to the end of 2012, from a prior forecast of reaching this target by the end of June 2012.

“This delay has been caused by a number of operational difficulties, including slower-than-expected mobilisation of rigs,” Exillon said in a statement.

The firm, with operations in two oil-rich regions of northern Russia, Timan-Pechora and West Siberia, said average production in February was 11,584 bpd.

For 2011, average daily oil production had increased 90 per cent to 8,884 bpd. For the full-year, Exillon reported a pre-tax loss of $7.1m (£4.4bn), compared with a pre-tax loss of $3.7m a year earlier.

It said in a statement: “The positive effect of increased production and higher crude prices was offset by growth in depreciation and depletion, foreign exchange loss and loss on disposal of non-current assets. Despite these losses, the group continues to be well funded and able to finance its ongoing operational programme.”

The FTSE 250 company recorded a foreign exchange loss of $6.7m from the revaluation of foreign currency monetary items during the year.

The company’s shares fell six per cent following the announcement. But chief executive Mark Martin said the firm increased oil production by 90 per cent and underlying earnings by 314 per cent.

“During 2012 we intend to continue to invest in order to achieve further increases in production, EBITDA and reserves.”

Capital investments during the year was $97.3m compared with $48m in 2010.