Global Petroleum losses widen as it seeks to preserve cash

Global Petroleum reported a loss after tax of $3.04m (£2.21m) in its first half on Friday, widening from $0.75m year-on-year, after a $2.41m impairment write off following the expiry of the PEL0029 licence.

The AIM-traded firm said its cash balances as at 31 December stood at $1.25m, up from $0.93m at the start of the financial year on 30 June.

It said that, in order to preserve cash, a further reduction in general and administrative expenses would be implemented from April, including a second 25% cut to UK director salaries and fees, alongside other savings.

The board noted the successful equity raise of £1.4m in September, to fund ongoing exploration work on its Namibian licences.

On the operational front, the firm secured a one-year extension to the sub-period on licence PEL0094 to September 2021 with the Namibian Ministry of Mines and Energy during the period, with an amended work commitment now completed.

Work commitments were also completed for the last phase of PEL0029, which expired in December, with no further extensions being allowed.

Global Petroleum updated its best estimate of prospective resources on PEL0094 in January, showing a threefold increase to 2,284 million barrels of oil net to the company.

The farm-out process for PEL0094 began in the first quarter, and was currently ongoing.

“The company's strategy remains to seek a farm-in partner for PEL0094,” the Global Petroleum board said in its statement.

“In parallel with the farm-out process, given the company's reducing cash resources and the continued delays regarding its Italian licence applications, the board has also decided to explore all strategic alternatives, in order to maximise shareholder value.”

At 0904 GMT, shares in Global Petroleum were down 4.23% at 0.68p.