These half-year results for India-focused Hardy Oil & Gas underline the many difficult challenges facing the company. Following the shut-in of the PY-3 oilfield last year, Hardy has been burning through cash with seemingly little progress being made towards a solution.
The arrival of a new management team, including non-executive chairman Alasdair Locke and chief executive Ian MacKenzie, spurred a "comprehensive review of the company's assets, strategy and resources" that began in March. Since then, however, there has been no material update on how Hardy proposes to turn around its promising but underperforming portfolio of assets. While management has enacted some good cost-saving measures, such as relocating their corporate office to Aberdeen, the company's post-tax loss for the first half still amounted to $7.2m (£4.6m), compared with a loss of $1.1m in the first half of last year.
What investors need to see now is solid progress on key development assets, or alternatively a sale and redirection. Achieving consensus among the partners for the PY-3 field redevelopment plan will be crucial, as will be continuing to advance the D3 gas asset. Until then, it's merely a matter of watching and waiting.
HARDY OIL AND GAS (HDY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 131p | MARKET VALUE: | £95.4m | |
| TOUCH: | 130-133p | 12-MONTH HIGH: | 223p | LOW: 112p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 165¢* | NET CASH: | $30.9m** | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 7.44 | -1.3 | -1.0 | nil |
| 2012 | nil | -10.0 | -10.0 | nil |
| % change | -100 | - | - | - |
£1=$1.58 *Includes intangible assets of $77.5m, or 106¢ a share **Includes short-term investments of $27.8m | ||||
