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Burren Energy: Full year results
Burren Energy announced a 163% increase in pre-tax profits (to £48.5m) for the year to December 2004. A 74% increase in average daily production (to 14,200 bopd) and better prices were the main causes for the improvement in profits. Burren’s reserve position also showed improvement: proven & probable reserves increased by 22% to 146 million bbls (entitlement basis) and by 37% to 246 million bbls (working interest basis).
Burren Energy is an independent oil and gas exploration and production group, that operates in the Caspian region of the former Soviet Union, West Africa, North Africa and India (through a 26% investment stake in the Hindustan Oil Exploration Company)
Successful drilling programmes in Turkmenistan and Congo were responsible for the increase in production.
With oil prices expected to remain firm in the medium term, Burren’s strategy is straightforward: to increase output. Net production currently stands at 20,400 bopd and the company hopes to increase it to 24,000 bopd by the year end.
To that end Burren will start exploration drilling in Turkmenistan, Congo and Egypt; upto 40 development and appraisal wells should be drilled, roughly equally split between Turkmenistan and Congo, and up to 8 exploration wells of which up to 2
will be in Egypt. Capital expenditure on the drilling and exploration programme is expected to be £100m, double the spend in 2004.
Growth prospects look strong justifying the a high prospective PE of 20x (at the current price of 536p). The yield is negligible at 0.5%.
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