InterOil Reports $24M Operating Profit for 4Q 2011

Norway's InterOil Exploration and Production generated an EBITDA of $24 million on operating revenues of $39 million in 4Q 2011, the firm reported Monday. Due to losses of $23.9 million on the oil hedging contracts, and significantly increased depreciation charges, the company recorded a loss before tax of $22.3 million for the quarter.

For 2011 InterOil generated an EBITDA of $98.7 million up from $58.1 million in 2010. Profit before tax came in at $30.1 million against a loss of $48 million in 2010.
InterOil's production in 4Q 2011 decreased by 5.6 percent compared to 3Q 2011, mainly due to decline in production on the San Luis Field in Peru. Despite lower production and slightly lower oil price, revenues increased by 0.6 percent compared to the prior quarter, due to a decrease in inventory in Colombia.
EBIT decreased from $18 million in 3Q 2011 to $4 million in 4Q, mainly due to an increase in depreciation and amortization of $12 million.
InterOil had net financial expenses of $26.6 million in the fourth quarter of 2011. Losses related to oil hedge contracts accounted for $23.9 million, of which realized loss is $4.3 million and unrealized loss is $19.5 million, while interest expenses amounted to $3.2 million. For the financial year of 2011, InterOil incurred net financial expense of $24.6 million. $7.2 million were related to oil hedge contracts, while $13.9 million were recorded as interest expenses.
Total comprehensive loss for the fourth quarter was $26.7 million after income tax of $4.1 million compared to a net loss of $22.8 million in the same quarter prior year. On a year to date basis the net income is $9.1 million after income tax expense of $20.5 million compared to a net loss of $48.9 million after income tax expense of $7.9 million in the prior year.
The license negotiations of Block III and IV with the state oil company, Petroperu, are continuing in good faith, reported InterOil, and for the time being the parties have agreed to full confidentiality during the process.
InterOil Peru plans to drill 10 wells at the San Luis field in 2012. The drilling plan depends on the final outcome of the license negotiations.
In Colombia, InterOil plans to drill at least one well in Altair and four wells in Mana starting in April 2012.
InterOil also reported Monday that its combined Peruvian and Colombian reserves as of Dec. 31 2011 stood at 6.2 million barrels of oil equivalent of proven reserves (1P), 7.2 Mmboe (2P) and 7.8 Mmboe (3P).