RH Petrogas says it expects to swing into the red for FY19

RH PETROGAS said on Wednesday that it expects to swing into a loss for the year ended Dec 31, 2019, compared to the profit it made in 2018.

The expected loss is mainly due to:

- the increase in the cost of production and higher depletion and amortisation of oil and gas properties in the Kepala Burung Production Sharing Contract

- the impairment loss on exploration and evaluation assets in relation to the acquisition and processing of a new 2D seismic data program in the SK331 Production Sharing Contract 

- the accrual for plug and abandonment costs for the TBA offshore field in the Salawati Kepala Burung Production Sharing Contract 

- the increase in finance costs due to the recognition of interest expense on lease liabilities.

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The losses were partially offset by the higher revenue from sale and lifting of crude oil as well as the gain on disposal of Mastique Investments and its only subsidiary Kingworld Resources, the group said.

RH Petrogas added: "Notwithstanding the above, the group continued to generate positive EBITDAX (earnings before interest, tax, depreciation, amortisation, exploration expenses, impairment and other non-recurring items) and net cash flows from operations in FY2019."

The full results will be published on or before Feb 29.

RH Petrogas shares last traded at S$0.046 on Feb 14.