Oil firms count losses from price collapse

03 September 2015, Lagos – The slide in global oil prices is weighing heavily on Nigerian oil firms, with one of the major indigenous independents, Seven Energy, forced to reduce the number of rigs working on its blocks to one from five at the beginning of the year.


seven energySeven Energy Finance Limited, together with its parent company Seven Energy International Limited, the indigenous Nigerian oil and integrated gas company, posted a loss after tax for the six months ended 30 June 2015, compared to a profit of $27m in the first half of 2014.

“The loss after tax of $53m was primarily due to the fall in oil price, combined with increased depletion charges and financing costs. This was partially offset by increased gas revenues,” the company said.

It said during the period, six new development wells had been drilled and completed, four gas and two oil wells, adding that one oil well work-over had been completed.

“The number of rigs working on the blocks (Oil Mining Licences 4, 38 and 4) has reduced from five at the beginning of the year to one rig currently; this being reflective of the reduced 2015 capital expenditure budget.”

The company said the contribution from the OMLs decreased to $64m in the first half of 2015, down from $122m in the same period last year, “due to a combination of lower realised oil prices, lower production allocated to profit oil and lower cost recoverable expenditure.”

Its capital investment was $136m, including additions and acquisitions, for the first half of 2015, compared to $571m in the same period last year.

– Punch

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