IGas Earnings Plunge in H1 on Weak Prices

The adjusted Ebitda of UK onshore producer Igas slumped to £2.2mn ($2.8mn) in the six months ending June 30, down from £7.7mn a year earlier, as revenues more than halved to £10.5mn on low prices.

The company, which operates oil and gas fields in the East Midlands, northwest and southern England and Scotland, also saw production fall to 1,940 barrels of oil equivalent/day in the six-month period, down from 2,360 boe/day a year earlier, it said on September 22. The company shut-in a number of sites in May in response to the collapse in oil and gas prices. 

Igas book an after-tax loss of £30mn, versus a £0.8mn profit a year earlier, as a result of £34.6mn in impairment charges on its assets to reflect lower prices. Its operating cash flow fell to £1.9mn from £8.7mn, while its cash and cash equivalents shrank to £2.6mn from £14.4mn. Igas' net debt increased to £11.2mn from £5.9mn.

"It has been an incredibly challenging period for the business and a worrying and difficult time for all our employees coping with the Covid-19 pandemic and with the collapse in commodity prices, continued market volatility and the uncertainty that persists," Igas CEO Stephen Bowler said. 

He noted that Igas had still managed to bring its Scampton Waterflood project into operation on time and on budget in July. It also bought US geothermal developer GT Energy earlier this month in a deal worth up to £12mn. 

"Our core conventional business is the driver of our future diversification and we will continue to exploit the potential that exists in our core assets and ensure we continue to invest to protect that business as oil prices improve," Bowler continued. "We will also consider other new technologies that complement our existing business, as we move forward."