Shelton Petroleum AB: Interim Report January-June 2015
Increased operating margin compared to the first quarter
January – June 2015
- Total revenue for the period: SEK 42 (63) million
- Operating result for the period: SEK 5 (15) million
- Operating margin: 12% (23%)
- Basic and diluted earnings per share: SEK 0.19 (0.70)
Statement from the CEO Robert Karlsson
During the second quarter, Shelton Petroleum produced 757 barrels per day. The company recorded a turnover of SEK 23 million and an operating result of SEK 4 million. Compared to the first quarter this year, the operating margin doubled to 15 per cent during the second quarter, mainly as a result of the development of the oil price.
The oil price continues to be volatile and the oil industry is still adapting to the new economic environment. Compared to last year, the lower oil price has affected turnover and operating margins negatively Shelton Petroleum and the industry as a whole. At current price levels the industry will continue to reduce investments. Although it is difficult to predict the oil price development in the short term, the lower investments will reduce supply levels, which in turn is expected to have a positive impact on the oil price.
Shelton Petroleum has built an attractive 2P reserves base in Russia amounting to 23 million barrels of oil. The production potential of these reserves amount to 5,000 barrels per day, which is about 10 times the current level. Shelton Petroleum is currently evaluating its options on how to finance further development. The company holds two substantial assets – the shareholding in Petrogrand, with a market value of SEK 45 million as well as receivables on a customer in Ukraine. If one or both of these could be used to generate cash, then Shelton Petroleum would be able to finance a drilling program to significantly enhance production. We are also considering industrial partnerships on the asset and corporate level.
As mentioned previously, it is Shelton Petroleum’s objective to dissolve the cross-ownership with Petrogrand. Following the recent change in the board composition of Petrogrand, the probability of reaching an agreement has increased.
In summary, Shelton Petroleum has established an attractive license portfolio with proven and producing fields, and I am looking forward to realize their value that is substantially higher than current production volumes show.
