Petroneft points to steady production

Production steady at 2,500 barrels a day, but losses widen to $10.6 million

Petroneft Resources, the Irish exporation company, updated its shareholders this morning, indicating that production in the six months to June 30th has been steady at an average of 2,500 barrels a day. This represents an increase of 13 per cent on the previous period.

The company reported a loss of $10.6 million (€7.8m) for the first six months of the year, of which $6.4 million was an exchange loss on intra-group loans. Petroneft has net cash of $13.6 million.

David Golder, chairman of PetroNeft said that the first half of the year was a "busy period" for the company.

“Some production issues were resolved leading to more stable production in recent months,” he said, adding that since the agm on September 11th, the company has continued to make good progress on re-financing.

“I hope to be able to update shareholders in detail on this point in the coming weeks.”

In a note, Davy Stockbrokers said that a successful conclusion to both increasing its production profile and re-financing its current debt, “should lead to a matching improvement in equity value”.

“The re-financing will lead to a greater availability of working capital and facilitate the re-start of the development programme on the Arbuzovskoye field as well as other locations,” the broker said.