Baron Oil narrows loss in difficult first half

Oil and gas exploration and production company Baron Oil announced its unaudited interim results for the six months to 30 June on Tuesday, reporting an an operating loss of £240,000 - down from £995,000 in the first half of the previous financial year.

The AIM-traded firm said following the closure of its operations in Colombia, there was nil revenue for the period, compared to £1.02m a year earlier.

Its board said it was continuing its approach of impairing both exploration intangibles and goodwill, with a total impairment charge of £954,000 - up from £1,000 year-on-year.

£636,000 of that was attributable to the unsuccessful exploration well on Woodburn Forest, and the remainder arose from Baron’s Peru activities.

During the period, the board said it reduced the impairment charge against receivables, giving rise to a credit to the profit and loss of £427,000.

After finance and tax, the company showed a net loss £183,000 for the period, narrowing significantly from £973,000 year-on-year, and representing a loss of 0.01p per share.

“The past six months have been a frustrating period for Baron' shareholders, with the failure of Woodburn Forest-1 and the continuing slow pace of progress in Peru, particularly on Block Z-34,” the company’s board said in a statement.

“The board has spent a great deal of time trying to move things forward in Peru and has succeeded in cutting the ongoing costs of operations there.

“Although we hope to be able to get a well drilled in Block XXI in 2017, the prospect is relatively small and we are attempting to find an industry partner to share a major part of the cost.”

The board said the Joint Venture in South East Asia offered a “great opportunity” for Baron to open up a new operation.

“[This is] one of the few areas of the world where there is both strong demand for oil and gas and the clear support of governments to make exploration and production easy to achieve,” it explained.

“We are particularly interested in gas opportunities because of the stable, long-term pricing environment.

“Having access to the experience and deal flow of the SundaGas team gives Baron a head start that would take years to achieve if built from scratch.”