Clyde to raise pounds 34m to develop oilfield: Rights issue accompanied by bigger loss

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The Independent Online
CLYDE Petroleum, the North Sea oil explorer, is raising pounds 34m from a rights issue to fund the development of Gryphon, a new offshore oilfield in which it has a 35 per cent stake.

The one-for-four cash call at 44p a share was accompanied by a collapse in full-year results to 31 December. Net losses jumped from pounds 1.2m to pounds 40m. The year's dividend has being passed.

Clyde said the rights proceeds would give it more flexibility to control peak borrowings during a period of high capital spending to bring Gryphon on stream by late this year.

The deficit reflected Clyde's move to a more conservative method of treating exploration costs. The switch required that all unsuccessful exploration costs be charged directly against profits, prompting a pounds 42m write- off last year, pounds 10m higher than a restated 1991 bill.

In addition, interest costs rose from pounds 8.4m to almost pounds 12m because of rising expenditure relating to development of the pounds 270m project. Net debts at the year- end amounted to pounds 147m, equivalent to 90 per cent of net assets. With another pounds 90m due to be spent on Gryphon this year, debts are likely to rise.

However, the new field is expected to boost Clyde's total production by 60 per cent to about 40,000 barrels per day and help to pay down its borrowings.

Analysts believe rising production could reduce borrowings to about 60 per cent of net assets by the end of 1994. The shares fell 4p to 51p.

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