LONDON (Alliance News) - Phoenix Global Resources PLC on Friday said its loss narrowed in 2018 after the non-repeat of an impairment charge, but exploration costs surged as it progresses on the development of Puesto Rojas in Argentina.
The oil and gas company reported a pretax loss of USD61.5 million for 2018 compared to USD286.7 million a year earlier, as revenue rose by 25% to USD177.0 million from USD141.8 million.
In 2017, the company recorded an impairment charge of USD232.4 million, which did not repeat in 2018. However, exploration expenses jumped to USD9.4 million from just USD931,000 million the year prior.
"In 2018, the focus of the company has been on consolidating our ownership positions and on appraising and de-risking our key unconventional assets," explained Chief Financial Officer Kevin Dennehy.
"In early 2019, we were awarded a 35-year unconventional concession at Puesto Rojas, the first of its kind issued in Mendoza province. The award of this concession provides clarity and incentive for our unconventional ambitions at Puesto Rojas," added Dennehy.
Following the issuance of the unconventional regulations and the establishment of the permitting process, the company carried out an eight-well completions campaign in Puesto Rojas.
As a result of the work, three prospective unconventional opportunities were identified: Vaca Muerta, Agrio, and Chachao.
The Agrio has been identified as the primary near-term unconventional development prospect at Puesto Rojas with the other formations subject to further testing and appraisal before moving to development.
Average daily production in 2018 from the Neuquina basin in Argentina was 4,471 barrels of oil equivalent a day, 12% lower compared with production levels in 2017.
The decline was primarily due to losses at Puesto Rojas of 743 barrels of oil daily as production wells were taken offline while hydraulic fracturing operations were carried out nearby as part of the eight-well campaign.
Average daily production at Chachahuen, which is also a part of the Neuquina basin, increased by 17% in 2018 to 2,348 barrels of oil equivalent daily, reflecting the contribution of the 92 production wells that came online in 2017.
Phoenix shares were untraded on Friday, last closing at 16.00 pence each.