Financial highlights
Strong cash position of £19.1m at 30 June 2009
Debt free with £7.5m secured facility undrawn and fully available
Completed farmouts on Kraken, Hydra and Selkie for £11.9m of cash and past cost contribution
£11.8m spent on portfolio development
Nautical has had a tough year. The combination of the failure of the Kraken appraisal well in Oct 08 , the credit crunch and the oil price collapse led to a dramatic fall in its share pricce to about cash levels. From the Chairman's statement:
Plainly at oil prices of around US$40 per barrel, the market assigned no value to our portfolio of discovered hydrocarbons or our diverse exploration portfolio. Stimulated by the welcome fiscal boost from the Chancellor's April 2009 budget announcement of the new Field Allowance's for heavy oil fields, and subsequently by a recovery in oil price to levels above US$70, the share price has stabilised to its current level.
While short term oil prices trends can be very uncertain there is reasonable consensus that over the medium to long-term timeframe, prices will not drop below US$70 per barrel for a sustained period, while the probability of further growth remains. Importantly for our future heavy oil production streams, the narrowing of the discount related to heavy oil is also a broadly accepted trend.
With this commodity pricing backdrop, the potential value of Nautical's interests in the successful development of Mariner and Kraken is still very heavily discounted but we are confident that increasing value will be attached to these assets once the respective Joint Venture's move these field developments into the execution phase.
Looking forward to what is expected next year:
Mariner
Background : http://www.nauticalpetroleum.com/911a.html
These increased volumes [from seismic interpretation] have not been included in the quoted resources since modified reservoir simulations have yet to be run. Furthermore studies through the period which have revealed reduced platform drilling costs, increased recovery rates, decreased water cut (using autonomous valves) will also be incorporated in the simulation and we aim to report the anticipated increase in resources during 2010.
The joint venture intends to pass through a major decision gate at the end of 2010 before submitting an FDP in 2011, followed by first oil in 2015.
Kraken
Background : http://www.nauticalpetroleum.com/92b.html
Considerable technical efforts are focused on predicting the…
