Linc Energy reports wider losses for Q4 and full-year

Global oil and gas company Linc Energy saw its net loss for the fourth quarter ended June 30 deepen to A$115.31 million (S$115.80 million) from A$73.04 million in a year-ago period, hurt by suppressed oil prices that reduced its profit margins and adversely impacted the revaluation of its oil and gas reserves.

As a result, its full-year loss also deepened to A$249.01 million, from A$223.71 million in the preceding year.

For the three months period, group revenue slipped to A$17.94 million from A$33.75 million, with the main drag coming from oil and gas sales.

Revenue from its oil and gas operations more than halved to US$11.9 million, from US$30 million, as the group reduced its capital expenditures on drilling, to maintain reserves until the commodity price improves. An impairment expense on oil and gas assets of A$59.4 million has been recorded for the fourth quarter, fuelled by a decline in the reserve volumes for the Gulf Coast assets.

For the full year ended June 30, group revenue slipped to A$87.79 million from A$148.39 million, dragged by a 47 per cent fall in revenue from its oil and gas operations to US$68.5 million.

Its net current liability position as at June 30 of A$4.13 million is primarily due to convertible bonds (CBs) due in 2018 that provides for an option for CB holders to require the company to redeem the notes on April 10, 2016.

"It is currently unknown whether any of the CB holders would look to exercise their option on that date," Linc Energy said. "However, under accounting standards the company is obliged to assume that all CB holders will exercise their option and so the full CB liability has been recorded as current at June 30, 2015."

Linc Energy said it has engaged with holders of the CB to provide more certainty over the quantum which may or may not require to be redeemed on that date.