Trap Oil (TRAP) experienced a problematic year on the operational front. The North Sea explorer's ability to generate a sustainable level of cash flow has been enhanced by the acquisition of a 15 per cent stake in the Athena field, but the December completion of the deal means that the accrued benefits won't become obvious until publication of its 2013 interim results.
Although Trap Oil managed to drive revenues in 2012, partly on the back of new production from its 20 per cent interest in the Lybster field, net losses more than doubled to £10.9m. This was primarily due to a £6.8m non-cash impairment linked to relinquishing the Inverewe, Lytham and Sienna licences and unsuccessful drilling at the Magnolia exploration well.
Trap had better luck at the Orchid and Romeo wells, though. It also secured equity positions in the Knockinnon, Orchid and Trent East prospects, and is seeking to secure operator status. And Trap’s management make the point that the £22m Athena acquisition is currently generating about £2m of free cash flow per month, so over 2013 they expect to have cash payback in full. In addition to the Athena acquisition, Trap won three licences in the 27th Offshore Oil and Gas Licensing Round.
