Zoltav Resources Inc: Final Results for the Year Ended 31 December 2020
Zoltav, the Russia-focused oil and gas exploration and production company, announces final results for the year ended 31 December 2020.
Financial Summary
· Revenues increased by 2% to RUB 1.24 billion (2019: RUB 1.22 billion)
· Total cost of sales was 22% lower at RUB 833 million (2019: RUB 1.07 billion)
· Operational and G&A costs increased by 20.7% to RUB 289.2 million (2019: RUB 241.6 million), mainly due to increases in staff costs as a result of the strengthening of the management team
· Other expenses decreased by 71% to RUB 34 million (2019: RUB 118 million) as a result of a positive change in the decommissioning and environmental restoration provision
· Operating loss reduced by 69% to RUB 913 million (2019: operating loss of RUB 2.98 billion) mainly due to the change in depreciation and depletion as a result of 2019’s significant impairment of non-current assets and lower impairment charge
· Loss before tax reduced by 66% to RUB 1.04 billion (2019: loss before tax of RUB 3.1 billion)
· Net cash generated from operating activities increased by 39% to RUB 383 million (2019: RUB 276 million)
· Total cash at the end of the period was RUB 26 million (2019: RUB 4 million)
Operational Summary
· Average net daily production (sold to customers) in 2020 was:
o 26.8 mmcf/d (0.76 mmcm/d) of gas (2019: 24.5 mmcf/d (0.69 mmcm/d))
o 204 bbls/d (26 t/d) of oil and condensate (2019: 246 bbls/d (31 t/d))
· The Western Gas Plant continued to operate efficiently throughout 2020 with one planned shutdown for works which were completed efficiently
o Operations at the plant have continued throughout the COVID-19 pandemic without interruption
o Safety and precautionary measures have been implemented to reduce risk of infection
o A Hazard and Operability study to identify potential operational hazards of the production process was carried out
· A development drilling programme, initiated in May 2019, continued apace throughout 2020 and included the drilling of three side-track wells on existing well stock and two new wells
· Feasibility study on East Bortovoy continued throughout 2020
o A substantial feasibility study was completed in the period
o Well operations and technical analysis have been completed and the project has been successfully reviewed by an independent technical consulting firm
o The design of the gas pipeline has been completed in the period, and the Company has received the necessary construction permit
o Technological studies and contractor selection processes have been undertaken
o Project final investment decision remains subject to financing
Lea Verny, Independent Non-executive Chairman, commented:
“We are pleased to report that production for sale at the Bortovoy Licence grew by 8% in 2020. The growth of production is due to the successful implementation of geological and technical measures including the continuation of a substantial development drilling programme on West Bortovoy. I would like to acknowledge the work undertaken by our teams to deliver this improved production performance safely and efficiently.
“During 2020, the Company also completed a substantial feasibility study on the East Bortovoy fields. A substantial amount of planning work has been undertaken on the project, for which a final investment decision remains subject to finance.
“I would like to thank our major shareholder ARA Capital Holdings for its continued financial support of the Company by way of a loan facility which has enabled the Company to advance its strategy of continued development of the West Bortovoy fields while progressing a potential future development of the East Bortovoy fields.”
The full annual report is available to download from the Investor Relations section of the Company’s website at www.zoltav.com.
