BULA Resources has written off £8 million due to the legal problems over title to 51 per cent of the Russian company Aki Otyr. It has also instructed lawyers Clifford Chance to establish if Bula has any remedies in respect of the losses incurred on the AkiOtyr deal.
If the lawyers advise that Bula has any remedies open to it, "these will be vigorously pursued by the board", the company has stated.
The £8 million writeoff of the AkiOtyr investment is the prime element in the £10.7 million loss for 1996 announced by Bula, compared with the £3.9 million loss in 1995. This brings accumulated losses at Bula to £17.7 million.
Elsewhere in Russia, Bula says an investigation is ongoing into the circumstances of a well on the Salymskoye field which was first declared successful with an oil flow of 942 barrels per day but which six months later was shown to have produced only insignificant amounts of oil.
Drilling results at Salymskoye have been disappointing and Bula is carrying out a review of its development strategy for the oilfield with the aim of identifying drilling locations which are capable of producing high rates of oil. "If drilling can be concentrated in the those parts of the oilfield where such high production rates are achievable, then we believe we can develop the oilfield profitably," the company has stated.
If a full development programme is implemented, Bula intends to fund it through a combination of debt and new equity, as well as the possible sale of the Bula stake in the field. Any development would be on a phased basis, the company added.
In Libya, where Bula has oil interests, the group has agreed to sell some of its interests to a Canadian group which will carry Bula's costs for the exploration phase and provide finance for a development programme.
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