Petrel Resources, the exploration company with interests in Namibia, incurred a loss before tax of £793,436 (€1 million) in 1998 compared with a profit of £1,242,187 (€1.58 million) in 1997. At the development stage, it has no revenue. But reflecting the losses, shareholders' funds fell from £697,731 to £361,354.

The chairman, Dr John Teeling, said the shock of low oil prices and the consolidation within the industry is throwing up opportunities. "Many projects are either too small or too frontier for the majors," he said. "Petrel can prosper in this environment."

In his annual review to shareholders, he noted that all of its projects could be seen as high-risk frontier ventures. In Namibia, Ranger Oil, its operating partner, "simply withdrew from the area. This despite the fact that proven gas reserves in the adjacent Kudu block doubled".

However, Dr Teeling said there was a "very positive story in Uganda". The results of a survey "strong indications of substantial structures".