Lower prices put dent in higher production numbers for Volga Gas

The AIM-traded firm added that during the same period, realised prices for oil and condensate net of sales expenses averaged $39.36 per barrel, as its shareholders gathered for its annual general meeting.

It said its cash position as at 30 April was $14.8m, down from $15.2m as at 31 December, after the payment of around $2.2m on capital expenditure, repaying the full outstanding balance of $1.7m of bank debt, and purchasing 450,000 of the company's shares in the market.

Volga Gas said it had been debt-free since February.

Revenues for the first four months to 30 April were $14.6m, down from $12.4m year-on-year, with higher production partly offset by slightly lower prices for oil and condensate.

The estimated EBITDA for January to 30 April was $5.3m, rising from $3.5m a year earlier.

In the year-to-date, the board said the main development operations had been the drilling of three sidetracks to existing wells - one on each of the VM, Dobrinskoye and Uzen fields.

Following successful process optimisation work undertaken with the Redox-based gas sweetening process during 2018, the Dobrinskoye gas plant had been operating at higher capacity and achieved average rates of 21.3 million cubic feet per day for the period between 1 January and 30 April.

The company said that importantly, the modifications carried out in 2018 also enabled the plant to operate uninterrupted during the recent winter and with reduced level of maintenance down time.

Management's next key objective was to improve the operational efficiency of the LPG plant, which began production in May last year, and to increase the yields from the gas stream.

The board had authorised additional investment of up to $2m for the purchase and installation of a turbo expander for the LPG plant.

“I am pleased to report that during this period, the company has had a strong performance operationally and financially,” said chief executive Andrey Zozulya.

“This performance is in line with management's expectations and the company is in a position to reward shareholders with a US$0.065 per share final dividend.

“The company is looking forward to delivering further improvements to the group's financial performance and to continuing distributions to shareholders, which will be considered by the board in September along with the 2019 interim results.”