Erin Energy impairment drags it into a deeper loss for 2017
An impairment of R78.7m for oil and gas expenses offset lower exploration expenses to drag Erin Energy into a deeper loss of $151.9m for the year to end-December, from $142.4m in the prior period.
The oil and gas company’s unaudited financial and operational results, released on Friday, show a 30% growth in revenue — thanks to a higher oil price — from $77.8m to $101m.
Erin Energy is headquartered in Houston, Texas, and is listed on the New York Stock Exchange and JSE. Its asset portfolio consists of five licences across three countries — Nigeria, Ghana and The Gambia.
The company, previously known as Camac Energy, has never declared a dividend, and its former CEO was accused of defrauding the Nigerian government by illegally pumping and exporting 10-million barrels of oil.
Exploration expenses totaled $4.6m for the full year, from $39.2m. Average net oil production for 2017 was about 4,900 barrels per day (bpd), compared to 4,800 for 2016. In the fourth quarter, net production was about 4,000 bpd compared with 5,800 for the comparative period in 2016.
The average price received for 2017 was $54.84 a barrel compared to $45.45 in 2016. Its year-end proved oil reserves were 7.1-million barrels.
The company announced in the year that it had successfully completed the drilling of a new well, the Oyo-NW exploration well, off the Nigeria coast.
In 2013, the Mail & Guardian alleged that Kase Lawal, the Nigerian-American head of Camac, had pledged millions to Jacob Zuma’s education trust and that he had organised him an honorary doctorate in Texas.
In 2001, the Nigerian police had reportedly charged Lawal with forgery and illegally pumping millions of barrels of oil, depriving the government of royalties. However, the charges were never tested in court.
Two years later, the Mail & Guardian ran a story claiming that the politically-connected Lawal was the beneficiary of unrelated government-to-government crude-oil allocations Nigeria had given to SA but from which the public got no benefit.