The Press and Journal (Inverness, Highlands, and Islands)

Weak whole­sale gas price hits profit but rev­enue up

● Chrysaor owes ex­pected £1.5bn but ex­pects debt to fall this year

- BY AL­LIS­TER THOMAS AND KEITH FIND­LAY Business · Stocks & Markets · Investing · Energy · Financial Markets · Finance · Industries · United Kingdom · ConocoPhillips · Norway · Conoco Global Power · Aberdeenshire · London · Cayman Islands · European Union

Weak gas prices have eaten into an­nual prof­its at the largest net pro­ducer of hy­dro­car­bons in the UK North Sea.

Ac­counts show Chrysaor made pre-tax prof­its of £364.5 mil­lion last year, which was a drop of more than 21% on earn­ings of £462.7m in 2018.

But rev­enue surged nearly 20% to £1.87bn, boosted by three months of pro­duc­tion from the Cono­coPhillips’ UK busi­ness ac­quired in a £2 bil­lion-plus deal last au­tumn.

Chrysaor – whose to­tal pro­duc­tion is split equally be­tween oil and gas – said its bot­tom line was hit by a whole­sale gas price av­er­ag­ing 36p per therm, com­pared to 43p in 2018.

The com­pany em­ploys about 1,200 peo­ple in the UK and Nor­way, up from 460 in 2018, prior to the Conoco deal, with its main op­er­a­tional base in Aberdeen.

It has its head of­fice in Lon­don but is reg­is­tered in the Cay­man Is­lands – a com­mon tax haven now black­listed by the EU.

The com­pany grew to 137,000 bar­rels of oil equiv­a­lent (boe) last year, from 105,000 boe in 2018.

Pro­duc­tion costs re­duced to $11.5 (£9.13) a bar­rel in 2019 from $12.6 (£10) .

Com­mod­ity prices re­mained “weak” in 2020 due to Covid-19 but the firm still ex­pects “pos­i­tive free cashflow af­ter in­ter­est and tax” this year.

Chrysaor, which now has a “ma­te­rial in­ter­est” in 11 pro­duc­tion hubs in the UK North Sea, in­clud­ing 100% stakes in Ever­est, Lomond and Ar­mada, had to in­crease its net debt by more than £1bn to com­plete the Conoco deal.

But the com­pany “does not fore­see” any need for fu­ture bor­row­ings be­yond its cur­rent £1.5bn, and ex­pects the debt to fall.

In its ac­counts, it also said it would “con­tinue to look at growth and val­uedriven op­por­tu­ni­ties”, mainly in the UK and Nor­way, to cre­ate a “mar­ket-lead­ing north Euro­pean ex­plo­ration and pro­duc­tion com­pany”.

Cap­i­tal in­vest­ment in 2020 is ex­pected to fall by 30%, com­pared to pre­vi­ous plans, due to the down­turn.

 ??  ?? NEW DAY: Sun­rise over Chrysaor’s North Ever­est plat­form as the com­pany filed pre-tax prof­its of £364.5 mil­lion last year
NEW DAY: Sun­rise over Chrysaor’s North Ever­est plat­form as the com­pany filed pre-tax prof­its of £364.5 mil­lion last year

Newspapers in English

Newspapers from UK