Lasmo raises payout by 60% as profits double

Lasmo, the oil exploration and production group, yesterday played down speculation of a shift in its dividend policy despite raising the payout to shareholders by 60 per cent, the first increase since its ill-judged 1991 takeover of Ultramar.

Joe Darby, chief executive, also pledged to beef up Lasmo's borrowing levels to fund extra investment on locating and developing new wells this year. He made the comments as the company unveiled pre-tax profits of pounds 67m for last year, almost double the pounds 34m figure in 1995 and underlining the scale of the financial turnaround since the Ultramar acquisition. The news boosted Lasmo's share price, which gained 7p to 246p.

The full-year dividend was hiked from 1.25p to 2p, which will be paid out of foreign earnings to avoid advance corporation tax. Mr Darby said dividend payouts were important to Lasmo's strategy, apparently signalling a shift in the company's previous approach. However, he insisted this did not represent a transformation for the company.

"We're not talking about being a dividend stock here. We've improved the dividend from what was a very low level in response to the 1996 results but by what remains a very small amount. Shareholders should still look primarily to capital growth."

Mr Darby also outlined an increasingly aggressive stance towards finding new sources of oil. Investment in appraising exploration and production activities this year is likely to be pounds 100m, up from pounds 75m in 1995 and pounds 54m the year before. However cash spent on developing wells towards the final production stage fell in 1996 by pounds 94m to pounds 153m, reflecting heavy outlays the previous year on large UK fields.

Lasmo said it was evaluating expanding its activities in the vast oil fields to the west of Shetland and hinted that its interest in heavy oil fields in the Italian Apennine mountains was progressing beyond expectations. Mr Darby said Lasmo had become the first foreign group to secure an oil partnership in Kuwait. The new concern, called Khaleej Petroleum, was with a local family which he declined to name. He also brushed off suggestions that political risks in Algeria made developing further lucrative fields there too dangerous.

The group's net debts dropped from pounds 489m to pounds 346m, a level which Dick Smernoff, finance director, said was almost too low. In 1992 Lasmo was left struggling with borrowings of more than pounds 1bn following the purchase of Ultramar. Mr Smernoff added: "We'd probably like to leverage the company up a bit. It just tells you how strong the balance sheet is at the moment."

About a third of the increase in profits came from the rise in oil prices last year. Lasmo's oil earned an average price in 1996 of $18.72 a barrel, up from $17.09 the year before. Production levels in 1996 rose by almost 7 per cent, to 175,000 barrels of oil per day.

Start your day with The Independent, sign up for daily news emails
Voices
Barn owls are among species that could be affected
charity appeal
News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas