InterOil Reports Financial Results for 1Q
InterOil reported financial results for the first quarter ended March 31, 2010.
First Quarter 2010 and Recent Highlights
- Balance sheet and liquidity remain strong with cash, cash equivalents and cash restricted of $75.8 million as at March 31, 2010.
- GLJ Petroleum Consultants, InterOil's independent resource evaluator, provided a resource estimate for the Elk and Antelope fields with a best case contingent resource estimate of 8.1 Tcf of natural gas and 156.5 million barrels of condensate (9.1 Tcfe) gross to InterOil.
- On April 15, 2010 InterOil entered into a preliminary works joint venture and preliminary works financing agreement with Mitsui & Co. to progress our proposed condensate stripping venture for the Elk and Antelope fields.
InterOil Chief Executive Officer Mr. Phil Mulacek commented, "InterOil's track record of success is continuing with the work being undertaken to develop a condensate stripping facility with Mitsui. Having established a resource base, our next step is to monetize it, and we're working diligently towards that and towards delivering on our overall strategic plan. Our corporate, refining and downstream distribution operating businesses derived a net profit for the quarter of $4.0 million, while the upstream and midstream liquefaction development businesses realized a net loss of $7.1 million.
Corporate Financial Results
InterOil recorded a net loss for the first quarter ended March 31, 2010 of $3.1 million, compared with a net profit of $2.6 million for the same period in 2009, a $5.8 million reduction compared to the equivalent quarter in the prior year. Our corporate refining and downstream distribution operating businesses derived a net profit for the quarter of $4.0 million, while the upstream and midstream liquefaction development businesses realized a net loss of $7.1 million.
InterOil's earnings before interest taxes, depreciation and amortization ("EBITDA") for the quarter ended March 31, 2010 was $4.9 million, compared with $10.9 million in the same quarter of 2009, a reduction of $6.0 million. Sales and operating revenue increased by $16.7 million from $160.8 million in the quarter ended March 31, 2009 to $177.5 million in the quarter ended March 31, 2010.
Business Segment Results
Upstream - During the quarter, InterOil completed logging in the vertical section of the Antelope-2 well after reaching total depth on January 30, 2010. After logging, the Company conducted operations to drill a horizontal sidetrack within the Antelope-2 wellbore in order to further evaluate the lateral variability, condensate ratio and flow capacity of the lower interval of the reservoir. Certain technical difficulties have delayed the drilling of this sidetrack which is still being undertaken. Certain technical difficulties have delayed the drilling of this sidetrack which is still being undertaken. In February, InterOil announced the purchase of a second drilling rig, built by Parker Drilling, for approximately $4.5 million. The rig is to be transported to PNG during the second quarter of 2010. Additionally, the development seismic program was completed over the Antelope structure during the quarter. This work consisted of 100 km of 2D acquisition to further define the Antelope structure to help select the locations of development wells in the field.
InterOil's Upstream business generated a net loss of $6.2 million in the first quarter of 2010 compared with a loss of $2.1 million in the comparable quarter a year ago. The greater loss was mainly due to increased administration and interest expenses, as well as higher professional consulting costs related to the asset sale process being undertaken to underpin development of the proposed Midstream Liquefaction facility.
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