Igas Energy's net loss greater than expected on extraordinary items

10th Jul 2013 13:19

The onshore oil and gas exploration outfit which describes itself as being at the heart of the UK's shale revolution - Igas Energy - has today released its results for the fiscal year ended on March 31st 2013. As analysts at Jefferies explain, the outfit's conventional assets continue to perform as expected, providing cash-flow for debt repayment and funding their unconventional [shale oil] exploration programme. The latter is where the up-side to the business lies primarily, they explain. More specifically, the company reported that its revenues tripled, reaching £68.3m, which allowed it to quadruple its underlying operating profits to £22.1m. Gross profits improved to £30.3m. Total production rose sharply, to approximately 902mboe versus 280mboe in the year before. Proven reserves also grew strongly, by 30% from 6.1 to 7.9 MMboe over the period between Jan 1st 2012 to June 30th 2012.Net cash from operating activities improved even more sharply, to £28.9m versus £2.6m in the year before. Worth pointing out, the company managed to restructure its capital base through the refinancing of its debt with Macquarie via the issuance of a $165m 5-year bond while at the same time carrying out the acquisition of P. R. Singleton from Providence Resources for $66m.IGas also successfully placed £23.1m in January 2013.The company reiterated its plans to begin its shale exploration/appraisal programme in 4Q13 with plans to drill 2 vertical wells which may be fracture stimulated after the data from the wells has been analysed.The top-line, cash-flow from operations and gross profit figures were in-line with estimates from analysts at Jefferies. Net losses, however, overwhelmed their forecasts (-£18.4m vs. -£0.5m foreseen) due to the company's decision to retire 'out of the money' oil price hedges sooner than expected and other significant cash and non-cash expenses associated with its debt refinancing. Shares of IGas Energy were rising by 0.67% to 112.25p as of 13:55PM. AB