Northern Petroleum PLC (LON:NOP) wants to build on a good H1 of trading, which is why they are implementing strategies to help them double their production.
At the moment, Northern Petroleum has a 400-barrel per day production. They recently issued a statement, though, saying they are putting together a program for the winter that will allow them to grow their output to 800 barrels per day.
This strategy was developed on the heels of a very good six-month time frame for the oil & gas company, which has laid the foundation for the company to expand further.
The firm brought five wells online around the close of H1 to improve their chances of increasing output. In the next few weeks, they’ll be starting production at another 3 wells to further increase output.
CEO of Northern Petroleum, Keith Bush, explained that the company has assets in Canada that can generate a significant output and cash flow.
A higher output led to a sharp growth of revenues for H1 which ended in June. Thus the company generated US$1.5 million in revenues in H1 2016 compared to US$223,000 in H1 2015. They also managed to generate a gross profit of US$95,000 and cut their losses in half before taxes, which came in at US$1 million compared to US$2 million during the same timeframe of 2015.
Administrative costs were reduced by 55% versus the same timeframe of the previous year, coming in below US$3 million. The company feels they can make even further savings in material operating costs.
The expected output increase along with additional savings will generate cash that has been earmarked to fund the company’s Alberta activities.
Northern further stated that they can maintain their existing financial position even with the price of US$50 per barrel, which is relatively low.
Norther Petroleum’s shares saw a decline of 10%, trading at a price of 2.9 pence per share.