MARK Routh, the chief executive of Independent Oil & Gas, has praised the efforts of the UK Oil & Gas Authority for its “pragmatic and co-operative” support in a testing period for the industry.
As Independent Oil & Gas (IOG) announced a return to profit for 2015, Mr Routh commented: “Given the difficulty of funding and drilling North Sea wells amid this severe downturn, we are very encouraged by the UK Oil & Gas Authority's pragmatic and cooperative approach.”
He added that licence extensions the company had received were vital in enabling IOG to play its part in fulfilling the authority’s objectives of maximising economic recovery.
The London-based oil and gas exploration company posted pre-tax profits of £5.3 million for the year-ending December 31, following a £12.1m loss in the previous year. This came largely as a results of a partial reversal of impairment provisions made against its properties. This year that totalled £6.2m, compared with an £8.25m impairment charge the previous year.
Mr Routh said the company remained “firmly committed” to the UK Continental Shelf, highlighting that in 2015 it had made progress towards drilling its planned appraisal well at Skipper which, he said, would firmly prove up the commerciality of the field. The licence for drilling at Skipper has been extended until the end of 2016.
“Despite the 75 per cent drop from peak to trough in oil prices since mid-2014, upstream oil and gas still remains a net margin-oriented business: it is possible to be as profitable with oil at current levels,” said Mr Routh. “That is why we remain extremely focused on cost management, lean operations and new models of collaboration. Our fundamental purpose remains to ensure IOG is resilient to low commodity prices but also ideally positioned to benefit from any eventual upturn in prices across both the oil and gas markets.”
In February the company secured a £10m convertible loan facility from London Oil & gas to provide additional working capital and access to funding for further acquisitions.
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