More on Burren Energy
Burren Energy: Trading update
Burren Energy’s trading update for the half year to June 2005 had a lot of good news. Group net production grew by 90% to 22,200 bopd while realised prices grew 46% to US$43.50 per barrel. Net production for the year is expected to average 22,500 bopd.
Production in Congo increased by 183% to 9,900 bopd while production in Turkmenistan grew 50% to 12,300 bopd.
There has been a delay in a part of the drilling programme in Turkmenistan due to delays in arrival of a deep drilling rig. The company will redeploy another rig from the same field to work on a deep drilling programme in October but this will slow production growth. Drilling of exploration wells in Egypt has also been delayed for the same reason.
In India, Burren’s offer to acquire a further 20% of the share capital of Hindustan Oil Exploration Company (HOEC) has run into problems following legal action filed by another shareholder, Hardy Oil & Gas. The dispute could delay production of HOEC assets.
Profitability this year will be good but the delays in the drilling programme and the dispute in India could slow growth. The share trades at 675p, on a PE of 10.2x (2005 earnings) with a yield of 0.5%.
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