Bula Resources has reduced its losses from £1.18 million (€1.50 million) to £699,000 last year, mainly by the raising of £4.6 million through a share placing. Meanwhile, the company would only say it is making "good progress" with the Libyan oil group Oilinvest about establishing a strategic partnership. The shares, which had soared in value on these rumours and of favourable prospects for the group in Iraq, were weaker yesterday after its results. The shares closed at 80 cents, down 12 cents.

Oilinvest supplies oil, refining, distribution, retail and wholesale marketing services. The conclusion of a partnership arrangement would help Bula to expand its activities in the Libyan market and could also attract other new global ventures.

The group's turnover increased from £265,000 to £496,000 in the 12 months to the end of December last. At year-end the company had net assets of £1.3 million compared with liabilities of £1.7 million in the previous year.

Bula managing director, Mr Tony Peart, said it is continuing to focus on securing oil exploration and production projects in Libya and Iraq.