Lasmo sells another pounds 127m worth of assets

Click to follow
The Independent Online
SHARES in Lasmo, the oil and gas explorer, added 5p to 166p yesterday after the company announced a further pounds 127m of asset disposals. The sales bring disposal proceeds to more than dollars 400m ( pounds 284m) so far this year, compared with a target for 1993 of dollars 375m.

The disposals are part of Lasmo's strategy to restructure its worldwide asset portfolio following its pounds 1.1bn acquisition in 1991 of its rival Ultramar. During 1992 Lasmo raised dollars 1.5bn, mainly by selling Ultramar's refining and shipping interests.

Joe Darby, who last week took over as chief executive from Chris Greentree, said: 'Despite difficult market conditions we have been able to dispose of assets at prices which compare favourably with those achieved for recent industry sales.'

Simon Flowers, an analyst at NatWest Markets, agreed that Lasmo had struck a good price for 'non-core, unproductive acreage'. He had valued the producing areas being sold at pounds 110m. Including other exploration assets, he said, would result in a profit on the sale for Lasmo as well as providing much-needed cash.

The bulk of the disposals, which were foreshadowed in the Independent last Saturday, are to Deminex UK, a German group. Assets worth pounds 106m include interests in 17 North Sea blocks, among them Lasmo's share of the Bruce, Keith and M fields.

In a second transaction, Pentex Oil has bought interests in the producing Balmoral and Maureen fields.

Lasmo owns an interest in about 150 North Sea blocks - the second-biggest holding after British Petroleum. A company spokesman said yesterday: 'We are being careful not to sell assets which provide good cash flow and we're satisfied that we've achieved that with this package of disposals. We can now concentrate on fewer, larger areas.'

The proceeds of the disposals will reduce Lasmo's gearing from about 90 per cent to 76 per cent and, according to Mr Flowers, should give Mr Darby a degree of flexibility over whether or not to cut the dividend when 1992's results are announced on 24 March.

Many City analysts think last year's 8.5p payout will be halved. Last year's dividend was held despite Lasmo's earnings falling to 3.4p a share. Chris Greentree had indicated that he would like to see the payout maintained.

'Prudence would say he should cut the dividend, after earnings fell to zero in the second half of 1992. But even the board probably has no idea yet of what they will do,' Mr Flowers said.

A spokesman for Lasmo said yesterday that although the company's initial target had been reached, there would be further disposals during the rest of 1993.