JOHANNESBURG (miningweekly.com) - Oil and gas exploration and production company Erin Energy has widened its net loss to $151.9-million, or $0.71 a share, in 2017, from $142.4-million, or $0.67 a share, in 2016.
The loss comes despite a 30% increase in revenue to $101.2-million and lower exploration and production expenses. The Texas, Houston-based company, which maintains listings on the NYSE and JSE, has booked an impairment charge of $78.71-million in 2017.
During the year, Erin produced 1.7-million net barrels of oil, compared with 1.8-million in 2016, but generated higher revenue owing to a stronger oil price. The company achieved an average price of $54.84/bl in 2017, compared with $45.45/bl in 2016.
At December 31, its crude oil inventory was worth about $3.6-million.
CEO Femi Ayoade said in a statement on Friday that 2017 had presented its challenges for Erin and the industry as a whole, but noted that the company's perseverance and some stabilisation of the commodity price had allowed for good progress.
Some of the company's "most exciting" accomplishments were the farm-out to ASX-listed FAR and Petroliam Nasional Berhad (Petronas), as well as its offshore blocks in the Gambia and the Miocene Formation discovery with the Oyo-NW well.
The company completed a farm-in agreement in early 2017 with FAR, which has seen success offshore in Senegal with its SNE field discovery and subsequent appraisal programme.
Erin recently also announced that a subsidiary of Petronas had also farmed into the Gambia blocks and that the joint venture (JV) plans to drill the Samo-1 prospect, which, as reported by FAR, is estimated to contain unrisked mean prospective resources of 825-million barrels of oil volume.
In addition, Erin announced earlier this year that it had successfully completed the drilling of the Oyo-NW exploration well, in the company's offshore Nigeria block, and that it had discovered hydrocarbons in the Miocene Formation.
The company is now planning an appraisal of the discovery for the second half of 2018, which is subject to the availability of capital and drilling services.
In Ghana, Erin said that the final judgement was issued by the International Tribunal of the Law of the Sea on Maritime Boundary Arbitration between Ghana and Côte d'Ivoire. The maritime boundary delimited by the Special Chamber's decision ruled in favour of Ghana and had no material impact on the company's Expanded Shallow Water Tano block.
Erin has restarted work with the Ghana government and its JV partners to progress operational activities and is planning a three-dimensional (3D) marine seismic survey acquisition later this year.
"We plan to tender the 3D seismic survey once we receive government approval," the company said in the statement.