Iodine and natural gas exploration and production company Iofina (AIM: IOF) reported good results from the recently acquired H&S Chemical, while expecting the progress of its flagship Atlantis prospect in Montana to be consistent after experiencing slowdowns that put the development behind the initial schedule.
Iofina’s interim losses amounted to £2.05 million compared to £317,496 a year ago, while losses per share increased to 2.38 pence from 0.43 pence for H1 2008.
The company reported “substantial progress” made over the past six months, during which period Iofina raised £5 million through equity placing to fund the acquisition of the entire issued capital of H&S Chemical for US$8.5 million in August. The business generated sales of £935,000 and a profit of £157,000 during August, which was its first month of operations with Iofina.
Iofina also acquired some 230,000 net acres at the Atlantis project to raise the total leased acreage in the prospect to 290,000, about ten times the initial 28,000 acres held at the initial public offering in May 2008. The acquisition included 17 shut-in wells, moving the company into initial gas production during H1 with continuous iodine production commencing at the end of July.
An additional 30,000 acres at Atlantis was acquired at no cost with a lease term of 12 months with the possibility to secure ownership if drilling commences before the expiry of the lease.
While acknowledging it was behind the original schedule on the Atlantis project, Iofina said it had taken the necessary steps to resolve the issues before the onset of the next drilling programme, expecting the development of the prospect to be more consistent and the exit rate production for the year end 2009 to be “closely on track.”
“...I believe the company is now on a much stronger overall footing with respect to delivering and executing its strategy and creating increased shareholder value,” said non-executive chairman Chris Fay.