NOW one of the UK's largest onshore acreage holders, Edinburgh Oil &
Gas filed its first-ever loss of #60,000 yesterday. The shares never
flickered and quite right too, because such reverses are the lot of
explorers.
In this instance, too, the fall could fairly be attributed to a 21%
drop in oil prices in the six months to June 30, compared with the same
period last year. An average of $13.38 a barrel instead of $16.95 cut
turnover from #1.1m to #886,000.
What really mattered to the market was confirmation from managing
director Alf Bissett that two promising new gas field projects were on
schedule and within budget. They should be producing for the fourth
quarter, which could make a difference to full-year returns.
Thanks to a successful placing and open offer last March, which raised
#3.88m net, the company has no debt and a stronger balance sheet. It
also helped fund Hatfield Moors' gas field being set up to fill a
contract for ScottishPower. Another significant development is in North
Yorkshire, with a power generation plant nearing completion.
When both projects come on stream production should increase eightfold
to 2,400,000 cubic feet a day. It is reckoned this will account for
about half total production by the year-end.
Further onshore properties acquired have included stakes in two
oilfields and an undeveloped discovery, all for #200,000 cash.
In the current half, Mr Bissett expects higher production from
development drilling on the Humbly Grove and Horndean oilfields, in
addition to the gas developments. And crude rates have already recovered
to around $18 a barrel, promising a return to profit and a large rise in
turnover.
Awaiting the gushers, Edinburgh's management has been practising tight
control of operating and overhead costs, mitigating the impact of the
lower turnover. Even so it is disappointed that last year's #103,000
interim profit was turned to loss.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article