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Oil and gas company Cabot Energy reported wider losses as significant unbudgeted cost overruns offset higher production and revenue.
For the year ended 31 December 2018, pre-tax losses widened to $6.2m from $4.0m a year earlier, while revenue more than double to $12.2m from US$4.8m as production increased 71% to 703 barrels of oil per day.
'Despite the overall strength of the Group's production and exploration asset base in Canada and Italy, it became apparent in 2018 that cost overruns and unobtainable production targets had led to past operational and financial deficiencies,' the company said.
In the first quarter of the year, revenue fell to $2.0m from $3.4m a year earlier as production averaged 511 bopd, down from 725 bopd .
The company said it was currently in advanced discussions to secure both short-term funding from its shareholder H2P and had also engaged a specialist financial advisory firm to source Canada asset-level debt financing to ensure that Cabot Energy was fully funded to commence its 2019 summer work programme and support the growth of the business.
The company, in the second of the year set out to improve the operational shortfalls. It improved the robustness of financial controls, reporting transparency and cost management; better defined and managed work streams in subsurface and operational planning and increased the effectiveness of the integration and communication between the central technical team and the local management teams.
'From an operational standpoint, we achieved a 339% reserves and resources upgrade in Canada with a 282 well location inventory, underlining our confidence to deliver sustainable production growth,' said Scott Aitken, Chief Executive Officer.
'In Italy, an independent resources report reinforced the Group's belief that we have a leading position which offers world-scale, high-impact exploration potential. The key now is to optimise the potential of our assets by adopting a managed, lean approach.'
'To this end, we are encouraged that our renewed focus on financial and operational discipline has successfully reduced production costs to less than US$20/bbl.'