Irish explorer United Oil & Gas has credited its Egyptian operations for a swing into profit during the first half of the year.
The London-listed company, which has assets in Egypt, the UK, Italy and Jamaica, published unaudited financial and operating results for the half year ended June 30th, 2020, on Tuesday.
Profit after tax stood at $1.8 million (€1.5m), which was up from a loss of $756,408 during the corresponding period the year before. The company more than halved its operating loss from $756,408 to $339,765.
Group revenue for the period was $2.4 million, while it recorded a gross profit of $265,323.
The company pointed out that operations in 2020 have taken place against the background of sustained low oil prices, driven in large part by the Covid-19 pandemic.
“Our low cost, low oil-price breakeven in Egypt is delivering positive operational cashflow even at the low oil prices seen earlier this year,” it said.
“United will continue to evaluate new venture opportunities emerging with the aim of putting the company in a position to move quickly should a value opportunity present itself.
“Our objective is to ensure that we emerge from the current challenging environment having used it as an opportunity and platform to grow.
“In this period of historic low oil prices, we have acted early and decisively to ensure that we protect our balance sheet, maximise cashflow, defer capital expenditure and reduce discretionary expenditure.
“We have deferred development capital expenditure in both Egypt and Italy, revised our G&A budget significantly and benefitted greatly from both our oil hedging programme and fixed price gas contracts.”
United Oil & Gas executive Brian Larkin said the company was well placed to tackle the challenges faced by the industry.
“2020 has been successful for United, with integration of the Egypt assets which are delivering low cost, sustained production, material reserves growth and positive operating cash flow,” he said.
“Post period end we were also awarded operatorship and 100 per cent ownership of the high impact Walton Morant exploration licence in Jamaica, we have strengthened the board and we recently welcomed new institutional shareholders onto our register, all of which marks our arrival as a full cycle oil and gas company.
“Looking ahead our focus remains on managing United in a responsible way as we allocate capital prudently and efficiently to grow the business.
“We are well placed to manage the challenges the industry is experiencing and to take advantage of an improvement in market conditions.”
