Phoenix Global Resources (PGR) has narrowed its pre-tax losses but was still $61m (£47m) from breaking into the black in 2018. This came with the backdrop of instability in Argentina, where it has now shifted all its production and exploration focus. Last year, the country asked the International Monetary Fund (IMF) for a $56bn bailout. And the possible return of Cristina Fernández de Kirchner as president in the upcoming election has already scared off bond holders. Phoenix will benefit from cheaper in-country costs from the weak peso but inflation at 55 per cent could eat into those savings.
On top of the jurisdiction issues, the company, effectively controlled by the Mercuria Energy Group, has had internal troubles – last month, it reported the sudden resignation of chief executive Anuj Sharma. Mercuria’s dominant shareholding position means a major strategy change is unlikely, however, and BP veteran Tim Harrington has taken on the interim role.
According to chief financial officer Kevin Dennehy, 2018 was more of a setting-up year with a focus on completions and securing non-conventional licences. Overall production was down 7 per cent year-on-year to 10,000 barrels of oil equivalent per day (boepd), with output from its conventional assets in the Neuquina basin falling, partly bdue to shutdowns while fracking was carried out. Completion of two new wells in the Mata Mora acreage is expected in the coming months Production was flat year on year, but net cash flow from operations was up to $20m from $7m in 2017, while reserves were replaced at a 96 per cent ratio.
| PHOENIX GLOBAL RESOURCES (PGR) | ||||
| ORD PRICE: | 16.55p | MARKET VALUE: | £ 461m | |
| TOUCH: | 16.55-17.95p | 12-MONTH HIGH: | 28.9p | LOW: 14p |
| DIVIDEND YIELD: | NIL | PE RATIO: | NA | |
| NET ASSET VALUE: | 12¢* | NET DEBT: | 53% | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016 | 129 | 17.9 | 1.00 | nil |
| 2017 | 142 | -287 | -19.0 | nil |
| 2018 | 177 | -61.0 | -0.03 | nil |
| % change | +25 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| *Includes intangible assets of $261m, or 9¢ per share | ||||
