Spitfire Oil facing challenge of 'Himalayan' proportion

Spitfire Oil was facing a challenge of mountainous proportions as it reported its interim results for the last six months of 2015 on Wednesday.

The AIM-traded company recorded a loss before tax for the period of AUD 460,906, compared with AUD 183,983 in 2014.

At 31 December, Spitfire had cash balances of AUD 4m, and said it had benefited from interest receipts of AUD 58,350 in the period, up from AUD 44,272.

Its operating costs totalled AUD 258,065, compared with AUD 228,255 a year earlier. The board said provision had been made for the impairment of exploration and development costs of AUD 261,191.

"Following the disastrous 2014 year for oil and gas prices, the trend tragically continued in 2015 with even further catastrophic falls in prices,” said Spitfire Oil chairman Mladen Ninkov.

“With the junior oil and gas equity markets effectively on life support and the projects available for acquisition economically unviable and the carrying costs unsustainable, the company has had little option but to preserve its cash holdings and look for projects in extractive industries which may have a long term future in a fast changing world,” he added.

Ninkov said nothing examined to date had yet fulfilled the requirements, but it remained hopeful such an asset would be available in the future.

“The challenge remains Himalayan in its proportion."