Monument produces 150% interim surge: Oil and gas group's exploration and development at unprecedented levels

MONUMENT Oil & Gas, the exploration minnow, signalled a dramatic new phase in its growth with a 150 per cent surge in net profits to pounds 5.3m for the half-year to 30 June.

The results come at a time of unpredecented exploration and development activity at the group. It is in advanced negotiations to raise about pounds 270m to finance its portion of a pounds 1bn project to develop a huge new oil and gas project in Liverpool Bay.

The venture, comprising four fields in which Monument has a 23 per cent stake, will open up a new oil province with estimated proven reserves of 1 billion cubic feet of gas and 170 million barrels of oil.

Monument is also planning to drill 11 wells in the second half, taking the year's total to 18. The most promising among them are two under way in onshore Argentina. The company took up a 22.5 per cent share in two Argentine blocks four months ago and has already hit a potentially big gas field in one. Meanwhile, it has put its Australian assets up for sale to reshape its portfolio.

The profit increase was achieved despite a fall in oil production from 10,000 to 7,900 barrels per day due to the sale of some producing assets in the North Sea. The disposals reduced the operating costs from pounds 7.7m to pounds 5m and helped cut the depletion charge to pounds 5.8m from pounds 8.4m.

The company was helped by a release of provisions amounting to pounds 202,000 and a higher oil price, which averaged pounds 12.60 a barrel compared with pounds 10.74 last year.

Operating cash inflow totalled pounds 10.4m, of which almost pounds 9m was spent on drilling and another pounds 5.2m on developing new assets. Net debt was marginally higher at pounds 6.4m, against shareholders' funds of pounds 134m.