Tullow Oil has announced an increase in its loss before tax from £222,335 (€282,000) in 1997 to £18 million in 1998. This was mainly due to exploration write-offs.
However, if these are excluded, Tullow still incurred an operating loss of £579,321.
The underlying trend in revenue fared no better. The preliminary results show a drop in sales from £6.2 million to £5 million.
This is attributed to the closure of the Syrian operations and the impact of weak oil prices. Despite this performance, the company is optimistic about the future. "Whilst poor sentiment in the petroleum sector masked important achievements by the company in 1998, the benefits of these measures are already being experienced in 1999," chairman Mr Tom Toner said.
He noted in particular "the signing of a gas sales agreement and associated gas production in Pakistan" which will have a "positive impact on our future results".
Due to the nature of the oil and gas industry with many options outside its control, Mr Toner said a flexible approach was necessary. With this in mind, Tullow is "examining a number of joint venture possibilities which will help to accelerate the development of our assets". The write-offs include £3.9 million for the closure of its Syrian operations (announced at the interim stage), £2.1 million in impairment value due to the fall in oil prices and a charge of £11.6 million for exploration and new ventures.
These have led to a fall in shareholders' funds from £51.6 million to £40.6 million. Reviewing the latest results, Tullow said the exploration well in Egypt was producing encouraging results.
Production at the Espoir oil and gas field in Cote d'Ivoire, West Africa, is expected to start producing in 2001 and 24 per cent of the income will accrue to Tullow. Other developments included the completion of a gas sales contract in Pakistan where initial production is scheduled for later this year.
Seismic programmes were completed in Pakistan and Bangladesh. And Tullow noted it had been awarded "two highly-prospective blocks in Romania".
