Hague and London Oil (Halo) returned to the black in the first half of 2019 thanks to hedging positions taken last year to protect the firm from gas price fluctuations.
London-listed Halo notched up pre-tax profits of £4.6 million in the first six months of this year, against a deficit of £900,000 last year, despite a dip in revenues to £11.8m from £13.8m.
The southern-North-Sea-focused firm’s main asset is a 9.95% working interest in the Joint Development Area (JDA) offshore Netherlands, comprising 31 producing fields spanning 7 licence blocks and five processing platforms, of which three have compression facilities.
The hedging of some gas production last year for 2019 has helped Halo manage profitability against the relatively weak Title Transfer Facility gas pricing so far this year.
The firm’s UK interests include a 45% interest in the Greater Pegasus Area development, operated by Spirit Energy.
The acreage contains the Andromeda prospect, on which Spirit started drilling an exploration well in July.
Halo said the results of the well were expected during the current quarter, and that Andromeda could be factored into a revised development concept for Pegasus.
Spirit had hoped to develop Pegasus as a tieback to the Cygnus platform, but operator Neptune Energy says the installation does not have enough capacity to play host.
Halo’s inaugural UK production is likely to come from the Sillimanite development, straddling the Dutch and UK median line in the southern North Sea and operated by Wintershall Dea.
Halo recently struck a deal with One-Dyas to buy stakes in several fields, including Sillimanite, which is slated for first gas in Q4 2020.
Interim chief executive Andrew Cochran said: “The first half of the year has been reasonably good and profitable, despite an acute drop in European gas prices the company has done relatively well due to hedging positions taken last year.
“Additionally, the second half of the year has already been very active with the provisional award of F5, spudding of Andromeda North and the announcement of the Proposed Acquisition, offshore Holland and UK.
“Parallel to all this the Company has addressed its growing capital requirements of the expanding portfolio through a structured finance agreement and mandating an advisor for a Nordic Bond issue.
“Once all of this has been accomplished Halo can look to realize liquidity for its shares next year.”