Island shows pretax loss of €7.8m despite big rise in turnover

Despite significant sales growth, exploration company Island Oil and Gas has reported a pretax loss of £5.39 million (€7.8 million) in the six months to the end of January, writes Caroline Madden

This reflects a £5.5 million write-off resulting from the plugging and abandonment of an exploration well in Inishbeg last August, the company said.

Island more than doubled its turnover during the first half of its financial year, achieving sales of £1.18 million compared to £476,000 recorded in the same period last year.

This marked improvement was attributed to increased production in the company's interest in the Seven Heads gas field.

The company emphasised that the backdrop to the results was an "extremely active period of domestic and international portfolio expansion".

Island was awarded two new licences in the Atlantic margin, and one significant gas prospect has already been identified in the new acreage added to its portfolio, it said.

In addition, the company was granted operation of the Amstel oilfield in The Netherlands during the interim period, and was also awarded a 20 per cent equity in a licence in Morocco.

"Our focus was to bring forward the value of our extensive portfolio by farming down our interests in projects and seeking strategic alliances which will allow us to progress a timeline of project development," chief executive Paul Griffiths said yesterday.

" believe that decreasing our financial exposure and finding partners willing to progress these projects quickly towards commerciality will build shareholder value," he added.

The focus of Island's drilling programme this year will be a well at the Old Head of Kinsale gas field.

This will be followed by its project in Schull.

The company is also pursuing further exploration opportunities in The Netherlands.