SINGAPORE (May 9): RH Petrogas, the investment holding company engaged in trading, exploration and production of oil and gas, reported 1Q18 earnings surged to US$2.7 million ($3.6 million) from US$0.7 million a year ago.
Revenue rose 32% to US$18.3 million mainly due to a 25% increase in the average realised oil price for the period from US$53 per barrel in 1Q17 to US$66 per barrel in 1Q18, as well as higher volume of crude oil lifted during 1Q18 as compared to 1Q17 at Basin production sharing contracts (PSC).
Cost of sales increased by 25% to US$15.7 million in 1Q18 compared to 1Q17 mainly due to the increase in cost of production and higher accrual for production expense as a result of over-lifting in 1Q18 following the adoption of a new financial reporting standard. These were partially offset by a decrease in depletion and amortisation of oil and gas properties.
In line with the higher revenue, the gross profit increased 97% to US$2.7 million in 1Q18 from US$1.4 million in 1Q17.
Other income for 1Q18 came in at US$1.3 million compared to US$0.8 million in 1Q17 mainly due to foreign exchange gain and higher head office overhead charged to partners in Basin PSC.
Despite the improved sentiment, the outlook for the oil market remains volatile in the near term. The group will continue to maintain a prudent approach in managing its operating costs and focus its efforts on improving operational efficiency.
Shares in PH Petrogas closed at 9.4 cents on Wednesday.
