BULA Resources has announced that its loss before tax has increased to £411,000 (€522,000) from £319,000 (€405,000) in the first half of 1999. The loss reflects difficult trading conditions in its North American operations due to continuing production problems, the interim statement said.
With positive sentiment restored to the oil sector and with sustained higher oil prices, however, the company believes it is in a strong position to take advantage of the "new era of normalisation in Libya and potentially in Iraq".
Some of the North American properties were now at break-even point and some were profitable, said Bula's chief executive, Mr Tony Peart.
Further meetings have taken place with the National Oil Company in Libya, concerning its outstanding contract negotiations for multi-block exploration and development packages.
Bula said these negotiations should be concluded in the second half of the year.
It may have to seek fresh funds by the end of the year, however, although this will depend on how the negotiations in Libya are progressing.
It raised £1.75 million over a year ago, but then incurred a loss of £1.18 million in 1998. That amount, along with the latest losses, used the majority of these funds.
Mr Peart noted that the company was still relying on shareholders' funds and would have to take a view about funding by the end of the year.
Administrative expenses rose from £80,000 to £93,000 in the first half. These, he said, reflected the new management team and trips to Libya.
He said the reserves in Libya were secure, however. Once an agreement was reached, Bula would be able to raise funds on the properties; these would probably be a mixture of equity and development finance.
In Iraq, Bula is waiting for contracts for Block 4 to be approved by the government. In June, it was awarded a further two million barrel lift as part of the sixth programme under the UN-sanctioned "oil for food" programme. This will run out in November, but Bula is optimistic about participating in another programme.
The interim results show a rise in turnover to £245,000 from £104,000.
Legal expenses were reduced to £55,000 from £127,000. Mr Peart said these were expected to continue but at a lower level.
