Britain's Hardy Oil and Gas Plc (HAOG.L: Quote, Profile, Research, Stock Buzz) posted an operating loss for the first half on lower crude oil prices and higher costs, and cut its 2009 production forecast as its only producing field was shut for repairs.
The company lowered its 2009 average gross production estimate to 2,400 stock tank barrel per day (stbd) from 3,000 stbd due to the unplanned shut-in of its PY-3 producing field in India.
Hardy Oil expects production at the PY-3 asset to restart in September, with substantial reduction in costs.
The oil and gas explorer with operations in India and Nigeria said it expected to drill the first exploration well in D9 block and an additional well on D3 block in the Krishna Godavari basin, India, in the second half.
Brokerage Arden Partners, which rates the stock at buy, said despite the inter-family Ambani dispute over the allocation of D6 gas, the evidence remains that the KG Basin is a key gas play for India and its exposure continues to underpin Hardy.
Hardy is also looking at merger and acquisition opportunities as they come by and it seems quite a few assets that are coming right now, Chief Executive Sastry Karra said.
But we are highly selective and would like to focus more on de-risking our assets, particularly in the KG Basin in India, and grow our own projects before we take on other new projects or entering any other countries, Karra told Reuters.
For the six months to June 30, Hardy posted an operating loss of $5.5 million, compared with breakeven a year ago.
Net loss was $4.3 million, compared with a net profit of $6.2 million in the year-ago period when it had a gain on sale of investment of $9 million.
Revenue fell 41 percent to $5.8 million, mainly due to a 52 percent decline in crude oil prices.
Hardy Oil shares recovered from early losses and were flat at 300 pence by 1035 GMT on Monday on the London Stock Exchange. They touched a low of 295 pence earlier.