LONDON - Sterling Energy PLC on Tuesday said it remained in the red during the first quarter of 2017, despite seeing revenue and production both more than double from the previous year, and it said its plan to drive growth through mergers and acquisitions is continuing.
Sterling said net production from the Chinguetti field off the coast of Mauritania was raised to 342 barrels per day on average in the three months to the end of March, improving from 106 barrels daily a year earlier.
That helped to bump up revenue in the first quarter to USD2.1 million from just USD725,000 a year earlier. Notably, total revenue over all 12 months of 2016 was USD4.8 million, implying Sterling is on track to comfortably multiply revenue over the full year.
The adjusted loss before interest, tax, depreciation, amortisation and exploration expense was USD784,000 in the first quarter versus the USD2.0 million loss a year before, while the loss after tax narrowed to USD1.2 million from USD5.0 million.
Net cash at the end of March stood at USD88.0 million, down from USD94.7 million a year earlier and only a touch lower than the balance at the end of 2016.
Sterling said the 2D seismic campaign in Somalia is to start in May or June this year, where it is focused on its 34% working interest in the Odewayne area. The seismic campaign is intended to fulfil "at least" the minimum work obligation for the current phase and will be the first seismic data acquired on the block.
As for Chinguetti, where Sterling is working with Tullow Oil PLC, Premier Oil PLC and others, Sterling said production in the first quarter of 2016 was "unusually low" due to technical difficulties, allowing for output to lift in the first three months of 2017.
"The Chinguetti joint venture are converging on the optimal solution to the current end of field life challenges. Discussions continue to be held with the government of Mauritania and relevant stakeholders on how best to both manage current operations and agree on a plan for a safe, cost-effective and technically robust decommissioning and abandonment phase," said Sterling.
Sterling Energy shares were trading flat on Tuesday at 15.25 pence.
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