Mosman Oil And Gas Ltd’s (LON:MSMN) financial results statement for 2019, released Tuesday, reflected a period of growth and progress, with its earlier decision to focus on the Stanley project appearing to be paying off.
Since then, however, amid severe macroeconomic volatility, the company has rolled back its strategy and is now preserving cash resources in the face of the coronavirus (COVID-19) pandemic.
Mosman's results for 2019 saw revenue almost double to US$998,369 and gross profit improved nearly eight-fold to US$571,937.
The company reported a US$4.32mln loss for the year, including US$4.14mln of impairments.
Earlier this month, Mosman told investors that the operator of the Stanley project has chosen to defer the drilling of the Stanley-4 well, and, at the same time Mosman began a full review of its operations.
In Tuesday’s results statement, Mosman said that the “events of early 2020 mean that growth objectives will now have to be constrained to manage cash flow, and costs have been further reduced."
“With current oil prices, the outlook for the next year will be challenging particularly if the oil price remains low as the likely financial impact on Mosman will be significant,” the group added.
Mosman ended December, 2019, with US$124,024 of cash and, in February, the company raised US$585,138 through a share placing, selling 200mln new shares priced at 0.15p each.
The company concluded that “the combined global events of a collapse in the oil price and the spread of Covid-19, have affected all stock markets and most countries.
"It is extremely difficult to predict the outcome of these matters. The company has taken action to reduce costs, and all operations have been reviewed," it added.