Global Energy Development at 10-year low as oil price slumps

26th Jan 2015 12:09

Global Energy Development saw shares hit a 10-year low after sliding oil prices hit its reserves valuation and prompted the write-down of assets in the Bocachico contract area. Lower oil prices called in to question the estimated quantity of proved and probable reserves, as well as predicted future net cash-flows from Colombian contract areas.The oil producer and developer said heavy oil reserves in the Bocachico Contract area had become uneconomic and that it will write-down the carrying value of those assets in its 2014 statement of financial assets.An estimate of $57.33 a barrel has been used in its 2014 reserve report, a significant drop from the $109.95 of 2013."The decrease in our proved and probable reserves and related write down of the company's oil assets on its statement of financial position at 31 December 2014 does not affect the company's cash balance," managing director Stephen Voss said in a statement."Given these sustained lower oil prices and the significant loss of value in our reserves combined with the recent sale of our Colombian producing properties, the company is reviewing options for creating value for shareholders in 2015," he added.Global Energy Development shares were down 12.5% at 36.75p on Monday afternoon.