THE INVESTMENT COLUMN : Lasmo is leaner after the escape
Friday 01 March 1996
Net profits for the 12 months to December came in above expectations at pounds 34m, reversing the previous year's loss of pounds 3m. That was a very respectable result, even after taking account of the massive pounds 24m bid defence costs which depressed the 1994 figures. Lasmo suffered a 5 per cent drop in production to 164,000 barrels a day of oil and gas last year as it sold older, higher-cost production assets. Last year saw the disposal of stakes in the Forties and Beatrice fields in the North Sea and an interest in the Malacca Straits in Indonesia. More recently a couple of elderly Canadian fields have gone.
But, along with overhead cuts, Lasmo's portfolio tidying has brought it very close to its target of pounds 3 a barrel operating costs by next year. After shaving a further 7 per cent in 1995, they now stand at pounds 3.17.
Although improving on that will get progressively harder, unit costs will be further reduced by higher production, set to rise to 185,000 barrels a day this year and 210,000 in 1997, and the advent of lower-cost fields. Liverpool Bay, for instance, which came on-stream at the turn of the year, pays tax at 33 per cent compared with up to 80 per cent in mature North Sea fields.
But the excitement in Lasmo lies elsewhere. Test results released yesterday confirm that Lasmo and its partners in the Hassi Berkine fields in Algeria have the makings of a massive oil and gas reserve.
The five discoveries there to date suggest a reserve potential of 1.5 billion barrels, with Lasmo's share put conservatively at 82 million barrels or 11 per cent of its total reserves. The eventual figure could be at least double that, depending on the outcome of further exploration: Lasmo plans 10 wells this year.
Meanwhile, the share price has been run up recently on renewed takeover speculation. Shell looks an obvious predator. As one of the world's largest natural gas groups, Lasmo's Indonesian and Algerian assets have obvious attractions.
In the meantime, the shares, down 4p at 184p, still stand at a discount to the 200p net asset value put on them by house brokers NatWest Markets. Good value.
- 1 Isis burns thousands of books and rare manuscripts from Mosul's libraries
- 2 Scarlett Johansson new band 'already hit with legal complaint' from another The Singles
- 3 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 4 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
- 5 'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Liam Gallagher brands Kanye West 'utter s**t' during BRIT Awards performance
Isis burns thousands of books and rare manuscripts from Mosul's libraries
Husband and wife die holding hands within hours of each other after 67 years of marriage
Mohammed Emwazi: Family of man named as 'Jihadi John' described by neighbours as 'normal Muslim family'
Mohammed Emwazi: Nine things we know about man named as Isis militant 'Jihadi John'
Oscars 2015: Birdman beats Boyhood as Eddie Redmayne and Patricia Arquette win big - as it happened
New theory could prove how life began and disprove God
Half of Ukip voters say they are prejudiced against people of other races
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
Aqsa Mahmood branded a 'disgrace' by her parents after claims she recruited three UK girls flying to Middle East
This is what it's like to be dead, according to a guy who died for a bit
iJobs Money & Business
£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...
£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...