Last December’s acquisition of a 15 per cent stake in the Athena oil field has allowed Trap Oil (TRAP) to deliver a half-year operating profit of £1.61m, compared with a loss of £1.62m in 2012 - together with net positive cash flow of £3.8m.
Athena's gross production rate reached approximately 10,800 barrels of oil per day (bopd) for much of the reporting period, but natural decline at the field and ongoing technical problems at the P2 and P4 wells have since reduced current output to 7,500 bopd (1,125 bopd net). Athena’s operator, Ithaca Energy (IAE), is assessing possible remedial action and production from P2 (1,400 bopd) should be restored shortly, although P4's difficulties look more complex. Still, and despite the reduced production rate, Trap is generating positive monthly cash-flow.
Investors, however, are likely to focus more on follow-up wells on existing discoveries at the Romeo and Brule, Trent East and Orchid fields. The outcome of high-impact drilling at the Crazy Horse and Niobe licences, in particular, could act as share price catalysts - although work at these prospects is subject to the success of planned farm-out agreements.
| TRAP OIL (TRAP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 10.9p | MARKET VALUE: | £24.8m | |
| TOUCH: | 10.5p-11.3p | 12-MONTH HIGH: | 19p | Low: 9.8p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 25p* | NET CASH: | £13.1m | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 0.77 | -1.55 | -0.75 | nil |
| 2013 | 16.9 | 1.40 | 0.62 | nil |
| % change | +2095 | - | - | - |
*Includes intangible assets of £28.2m, or 12p per share | ||||
