Irish oil and gas explorer Petroneft Resources has taken further steps to ensure the viability of its business following the significant impact the coronavirus pandemic has had on oil markets.
The company, which operates in the Tomsk Oblast, Russia, provided an update to Euronext Dublin on Monday in relation to operations for the full year 2019 and the first quarter of 2020.
“Petroneft prioritises the safety of our staff and our stakeholders in scheduling our operations at this time,” the company said. “All unnecessary travel has been suspended. Operations have been redesigned to ensure that social distancing is incorporated.
“Covid 19 significantly impacted on oil markets and on the financial position of all oil companies. Petroneft has taken further steps to trim our already lean operating model. These moves will help to secure the future viability of the business.”
In terms of outlook, Petroneft said the prices it receives for oil sales have improved from their low point in April.
“We remain cautious about the potential for further recovery in 2020,” it said. “However even this recovery has allowed us to re commence certain projects such as the mini oil processing facility.”
As of December 31st, and March 31st, the group’s cash balance was $300,000 (€266,403) and $700,000 respectively. In January, the company raised $1.6 million in a share sale.
As of December 31st and March 31st, the group’s gross debt was $4.3 million. The company has two outstanding debt facilities, a convertible loan note with various related parties and a loan with Petrogrand AB.
The company said the publication of its annual report had been delayed due to the Covid-19 pandemic, which has resulted in lockdowns in all areas where it operates or has offices.
“The delay in publication reflects the additional time needed to complete the audit given the associated travel restrictions and delays in fulfilling audit requests,” it said.
“Accordingly, the company has requested and received an extension from both the ISE and AIM to its filing deadline for its final results from June 30th, 2020, to September 30th, 2020.
Petroneft chief executive David Sturt said the company implemented a “cost effective, locally driven, operations programme” in 2019.
“We have implemented a range of low-cost measures aimed at stabilising production at existing wells, identifying new opportunities for low cost exploration and development and reducing costs through more effective use of our assets,” he said.
“Developments in 2020 have hit our industry hard. We are working to manage the impact of Covid, to ensure the safety of our team and the sustainability of our business. We are seeing some recovery but this is fragile and we will maintain our discipline in the weeks and months ahead.”