Profits at Enterprise Oil dropped sharply last year from £94.7m before tax to £71m because of the cost of its failed bid for Lasmo.
Without the City fees for the bid and a provision for the falling value of a stake in Lasmo the independent exploration and production company would have seen unchanged profits.
Operating profits before the bid costs were £94.8m compared with £94.7m in 1993, but the bid cost £23.7m. The £18.1m provision for Enterprise's 9.8 per cent in Lasmo is unchanged since the half-year results. The price of 150p to which the Lasmo shares were written down is just below the market price.
Enterprise is trying to overcome its reputation as a cash-rich but reserve- poor company in search of new production prospects, an image that Andrew Shilston, finance director, said was created by Lasmo during its bid defence.
Mr Shilston said oil output showed a healthy increase of 28 per cent to 180,000 barrels a day and would rise to 250,000 by 1996, staying above 200,000 at the turn of the century.
Furthermore, Enterprise had gained 80 million barrels of reserves last year while producing 66 million barrels, a net gain. This year, said Mr Shilston, the company was drilling about 40 wells compared with 25 in 1993. By 1998, it expects to see the fruits of this new exploration.
He said: " We are trying to help people forget Lasmo's campaign to persuade people that we are falling off a cliff."
Mr Shilston rejected the City view that Enterprise still needed to make a dramatic move to make up for the Lasmo defeat, and said it was in no hurry.Reuse content