When loss-making oil explorers issue financial results, the juicy details are often in what lies ahead.
That was the case for UK Oil & Gas, the operator of the Horse Hill project near Gatwick run by the outspoken Australian David Lenigas.
It made a £383,000 loss for the six months to the end of March, up from £290,000 the year before, and banked revenues of £200,000 after selling 3,434 barrels of oil.
UK Oil & Gas has been in the spotlight of late on the back of hopes that the Horse Hill well, dubbed the “Gatwick Gusher”, could be Britain’s answer to Dallas. But there are still plenty of questions about how much of the oil can actually be extracted or is worth extracting, given the costs involved and the price of oil.
The company has big plans for the next six months, so expect more news on flow testing and growing the resource — effectively ticking all the boxes in a bid to “de-risk” the project, as they say in the industry.
The fear for many private investors is a lack of cash leading to a dilutive fundraising, so an £8 million bank balance will be music to their ears.
Lenigas said: “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.” Twitter-mad Lenigas took to the micro-blogging site today: “UKOG interims just released. Shows how strong UKOG is as an emerging UK E&P [exploration and production] company.”
Judging by another recent Twitter comment, it looks as though Lenigas has his sights set on drilling for oil in Central London, baiting those who didn’t believe there was oil under the city to “prove me wrong!”. The shares fell 1% to 2.23p.
The FTSE 100 rose 33.94 points to 6868.81 as hopes were still high of a resolution for Greece’s debts. Investors stocked up on supermarket shares, with the buzz coming from the $29 billion (£18 billion) merger of the Netherlands’ Ahold and Belgium’s Delhaize to take on Wal-Mart in the US.
Sainsbury’s, up 7.7p to 276.9p, Morrisons, up 5.2p to 185p, and Tesco, up 3.2p to 219.4p, were among the top blue-chip risers.Chipmaker ARM Holdings dipped 3p to 1134p after Liberum Capital suggested that Apple, its main customer, could soon stop using its technology.
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