The operator of the Horse Hill oil site in Surrey made “substantial losses”, its latest accounts have revealed.
Horse Hill Developments Limited (HHDL) lost £1,155,205 in the year to September 2019. This compared with £512,667 in the nine months to September 2018.
The company relies on funding from its shareholders, including the parent company, UK Oil & Gas plc (UKOG).
The accounts said UKOG intended to provide funding based on HHDL and its shareholders agreeing a budget for the next 12 months.
The company could also reduce costs it necessary, the accounts said:
“The cost structure of the company comprises a high proportion of discretionary spend and therefore in the event that cash flows become constrained, costs can be quickly reduced to enable the company to operate within its available funding.”
The accounts also revealed that HHDL had sought an extension to the permission to test its second well, HH-2z. The extension would “ensure that sufficient data is available to enable the correct decisions to be made”, the company said.
Water problems in the HH-2z have delayed plans for long-term production. UKOG has said it is considering options including stimulation, sidetracking and converting it to a water re-injection well.
Turnover: £0; 9 months to 30 September 2018 £0
Cost of sales: £0; 9 months to 30 September 2018 £0
Gross profit/loss: 9 months to 30 September 2018 £0
Admin expenses: £241,925; 9 months to 30 September 2018 £257,854
Operating loss: £241,925; 9 months to 30 September 2018 £257,854
Interest expense: (£913,280); 9 months to 30 September 2018 (£254,813)
Loss for the year: £1,155,205; 9 months to 30 September 2018 £512,667
Exploration and evaluation assets: £16,417,933; 9 months to 30 September 2018 £13,521, 890
Current assets: £1,334,132; 9 months to 30 September 2018 £3,559,673
Net current liabilities: £594,082; 9 months to 30 September 2018 £1,386,625
Income from sales of oil generated by long-term testing: £2,410,945; 9 months to 30 September 2018£47,694. This figure is credited against the exploration and evaluation assets on the balance sheet.
Loan balance outstanding to UKOG, Doriemus and Alba Mineral Resources: £14,636,896; £12,572,617
Decommissioning provision at 30 September 2019: £144,341; at 1 October 2018 £148,170
Link to accounts (see accounts dated 5 October 2020)
Updated 7/10/2020 to include link to accounts and correct figure for 2019 income from sales of oil