Losses at Petrel Resources widen on asset impairments

Losses at Petrel Resources widened to almost €3 million in 2014 as impairments in its exploration and evaluation assets reached more than €2.5 million.

The company said it cut administrative expenses to €431,000 from more than €500,000 a year earlier.

Petrel, which is active in offshore Ireland, Iraq and Ghana, has seen its share price suffer due to a downturn in resources. Chairman John Teeling said the company's share price had declined to 3p, reflecting a "lack of interest" in junior explorers.

"While currently there appears to be some weak indications of interest returning principally more buying activity, and some media interest, the overall position remains dire. There is nothing new in vicious junior resource company share price cycles but the current version is deep and long," he said, noting that Petrel had cash and a partner, Woodside Energy.

Petrel has been embroiled in a legal battle over an exploration licence in Ghana, which Petrel and partner Clontarf Energy believed it had been awarded in the Tano offshore block. The companies spent $2 million on preparatory work, but in March 2014, the Ghanaian authorities awarded a licence to US company Camac that covered part of the same block. A court battle was resolved in October last year, but Petrel said the authorities there had yet to implement the agreement and discussions were ongoing.

The exploration firm said it had enough cash to continue for two or three years at present expenditure levels.

“This is not an option that the board accepts,” Mr Teeling said. “We are actively working with our partner, our advisors and the Irish authorities on helping them complete the Irish Offshore Strategic Environmental Assessment. An early resolution will enable orderly planning for 2016.”