PetroFalcon Slips into Red with US$2.3mn H1 Loss
Canadian natural resource company PetroFalcon (TSX: PFC), which operates in Venezuela, reported a US$2.3mn net loss in the first half of this year versus a US$1.5mn net profit in 1H05.
PetroFalcon operates in Venezuela through its wholly owned subsidiaries Vinccler Oil and Gas and West Falcon Hydrocarbons.
In the second quarter of 2006, the company posted a US$1.7mn net loss compared to a US$561,385 net profit in the year-ago period. As of June 30, 2006, PetroFalcon had working capital of US$8.7mn compared to US$10.3mn on December 31, 2005.
Vinccler signed an agreement in March with Venezuela's state oil firm PDVSA to form a joint venture for its East and West Falcon blocks. PDVSA will hold 60% of the JV.
The JV is in a "transition period," meaning PetroFalcon cannot yet record revenue for operations.
"We understand there is a lot of uncertainty for investors now, especially because we cannot yet register revenue or earnings from second quarter production in the East and West Falcon blocks," company chairman and CEO Juan Francisco Clerico said.
However, the company is being reimbursed for operating and capital expenditures during the transition.
"We expect this [transition] process to be completed in the third quarter," he said.
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