Cadogan Petroleum Plc (LON:CAD) has revealed a significant increase in gross profit and narrowing of net losses, thanks to improved oil prices and an upturn in its trading division.
The Ukraine-focused oil and gas firm, in financial results for 2017, reported an average realised price of US$41.60 per oil equivalent barrel, up from US$34.5 per barrel in the preceding year.
WATCH: Cadogan Petroleum increasing production and pursuing new opportunities
Gross profit amounted to US$2.1mln, up from US$1.1mln for the year before, meanwhile, the loss for the year reduced substantially to US$1.6mln from US$5.9mln.
Production for the year totalled 56,516 barrels oil equivalent, up 33% from 42,495 boe in 2016, with the key Monastyretska licence notably marking a 78% rise in output over the year.
Additionally, the company highlighted that it had completed its first step in a diversification strategy, acquiring a stake in an Italian project.
It also noted that the group’s trading business generated a “healthy” profit of US$1.3mln, versus a US$2mln loss in the preceding year.
“Cadogan has made another major step towards becoming a leaner and more efficient operator of marginal fields,” said Guido Michelotti, Cadogan chief executive.
“We have also made solid progress in delivering a sustainable performance, which, along with a robust balance sheet, maintains our strong platform and a springboard on which to build our future of growth.”
Michelotti added: “We expect oil production to grow further, up to 75% over 2017 production, driven by a three wells program of work-overs and stimulations in Monastyretska oil field4; we also expect that our perception of an upside in reserves and resources be confirmed by an integrated reservoir study, which was awarded in the first quarter of 2018.”