Stratic has filed its interim financial statements and accompanying Management's Discussion and Analysis for the quarter ended September 30, 2008.
West Don Development:
- First West Don production well encountered a horizontal section of over 2000 ft of high quality oil bearing Etive sandstone
- Northern Producer floating production vessel successfully moored on location in field
- Major subsea construction work including pipelay now completed
Exploration and Appraisal:
- Successful test of East Breagh appraisal well; West Breagh well recently commenced drilling
- Byford Dolphin semisubmersible drilling unit on-hire preparing to spud Stratic's first operated well on Cairngorm - an existing oil discovery in UK North Sea, to appraise the discovery and test the potentially high productivity of the reservoir
- Well planning being advanced for 2009 appraisal of Bowmore condensate discovery in UK North Sea
- 3 blocks awarded in the UK 25th Offshore Licensing Round, including 2 blocks in Breagh field area containing three tested gas discoveries
Financial (all amounts in US dollars):
- Gas sales revenues in Turkey of $2.2 million in Q3 (2007: $1.5 million) with production in the quarter of 186.3 mmscf (2007: 168.9 mmscf)
- Net loss for quarter of $13.0 million (2007: $5.4 million)
- Capital expenditure for the quarter of $19.9 million, mainly on West Don. 2008 capital expenditure projected at approximately $90 million, approximately half on developments and half on exploration/appraisal.
Kevin Watts, Stratic's President and Chief Executive Officer, commented, "We continue to make good progress in our core North Sea business with first oil from West Don on track for early next year, which is expected to transform our cash flow position in the future. We are greatly encouraged by the recent successful East Breagh well test, and we look forward to the results from the West Breagh well currently drilling. These wells could unlock the largest new gas development in the UK North Sea for a number of years. We are also about to spud our first operated well on the Cairngorm discovery in the North Sea, which represents another key milestone for Stratic.
"We are of course fully aware of the current world economic climate and the impact this has had and may continue to have on oil prices and access to capital. We are therefore currently reviewing our investment programme and capital structure to prioritise our projects in terms of returns, schedule and capital requirements. Following this review we expect to expand our divestment activity to release capital to increase our financial flexibility and maintain activity on our best projects."
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