Zoltav Resources FY profit to beat market expectations

7th Sep 2016 10:18

(ShareCast News) - AIM-listed Russia-focused oil and gas exploration and production company Zoltav Resources said on Wednesday that it expects pre-tax profit for the year to the end of December 2016 to be materially ahead of market views.In an update ahead of its annual general meeting, the company attributed the upbeat outlook to management's efforts to drive operational performance and an ongoing programme of cost optimisation at an operating and administrative level.Zoltav said that as well as focusing on organic growth, it has been actively assessing value-accretive acquisitions in Russia and the wider Commonwealth of Independent States. So far, the search has not yielded any prospects which the board considers to be in the best interests of the shareholders."It remains challenging in the current oil and gas environment to access deals that are sufficiently value accretive for shareholders, as sellers are yet to materially adjust their expectations."While this market dynamic persists, the board has resolved to concentrate the company's efforts solely on the performance of the Western Gas Plant and on the development of its organic opportunities at Koltogor and Bortovoy - particularly the considerable resource in the Eastern Fields of Bortovoy, where the company is working to understand better the feasibility and economic viability of the development options."Zoltav announced on Wednesday that it was restructuring its composition from six directors to three, commensurate with the current size of its business, to significantly reduce the corporate overhead while maintaining an appropriate level of corporate oversight.The new board will consist entirely of three non-executive directors. Subject to re-election, Marcus Rhodes will become non-executive chairman, while Alexander Gorodetsky and Andrey Immel will stay on in their roles as non-executive directors.Andrey Komarov will remain at Zoltav in a non-board capacity as chief executive, continuing to oversee "the excellent operational progress" being made at the Western Gas Plant.In addition to Stephen Lowden, Alastair Ferguson and Andrey Komarov will not stand for re-election at the AGM. At 1025 BST, shares were up 29% to 29p.