Richmond in red after output falls

RICHMOND Oil & Gas, the controversial US producer, has slipped into a first-half loss of pounds 386,000 for the period to 30 September against pounds 23,000 taxable profit in the previous year.

The deficit, on turnover down from pounds 5.7m to pounds 1.5m, was incurred despite a pounds 130,000 exceptional profit on assets disposals.

The decline reflects a sharp fall in production volumes following the foreclosure of its main gas and oil producing assets in Texas.

The company has been wracked by problems since its pounds 21m share offer in London 1989 flopped, with a 12 per cent take-up by investors.

A year after its flotation the company raised a further pounds 31m in a placing that also misfired.

Since then the Serious Fraud Office has launched an investigation into dealings in Richmond shares at the time of its flotation.

The company said yesterday it had cut administration costs by pounds 900,000 since last year and was carrying out further rationalisation. However, it is planning to drill 20 wells by March on its other US assets in Texas.

Meanwhile, it has entered into a Russian joint venture to develop a Siberian oilwell with proven commercial reserves of about 80 million barrels.

At present Richmond owns a 39 per cent stake in the venture. It is planning to sell part of that interest to raise an estimated dollars 18m to finance the project over a two- year period.

Richmond shares closed 1p lower at 4.75p yesterday. The shares have seen volatile trading in the past month, hitting a 12- month peak of 7p last week.