Lasmo has announced its fifth new oilfield in Algeria, bringing total estimated reserves to between 850 million and 1.2bn barrels. Lasmo said the discoveries could have additional upside potential, depending on the results of further drilling. The impact on the company is expected to be "significant".
The scale of the discoveries emerged as Lasmo announced it has cut losses to £3m in 1994 from £118m the previous year. The improvement was in spite of £24m in costs related to the failed bid for the company by Enterprise Oil and volatility in the oil price.
Rudolph Agnew, chairman, said the company was on target in terms of cost reduction, which will remain a major focus over the next few years. The company also said that it had benefitted from more focused exploration, concentrating on large targets rather than "trying to be all things to all people around the world".
Operating profits were flat at £109m and the loss per share was trimmed to 2.4p from 16.8p in 1993.
The dividend for the year is 1.25p compared with 1.3p the previous year and will be paid from foreign income, allowing Lasmo to overcome an advance corporation tax problem.
Joe Darby, chief executive, said that the company aimed to be profitable at current oil prices rather than on the assumption that prices would "take off".
The oil price last year averaged $15.81 (£10) per barrel compared with $17 in 1993.
Lasmo expects prices to be in the range of $15 to $17 this year, with some variation. There is ample fuel available to meet any pick-up in demand.
There has been speculation that Enterprise, which has held 9.8 per cent of Lasmo since the bid collapsed in July, will return to the fray. One City analyst said, however, that British Gas is a more likely predator, as Lasmo would increase British Gas' weight outside its regulated business in the UK.Reuse content