The chairman of Spitfire Oil said the junior oil and gas market had been severely, if not mortally wounded by the dramatic fall in the price of hydrocarbons.
Mladen Ninkov said it would be a massive understatement to say it had been a difficult year for the entire industry and by definition Spitfire, which is focused on its Salmon Gums lignite project in Western Australia.
The company, which has offices in Perth and London, reported a smaller pretax loss of A$596,094 for the year to June compared to the A$4.5million it had in 2014, largely due to the company booking a substantially lower impairment value on Salmon Guns.
Ninkov said: “The dramatic fall in oil and gas prices have severely, if not mortally, injured the junior oil & gas market.
“Nevertheless, the company has continued its extensive search for acquisitions in the oil & gas sector with no success primarily due to the uneconomic nature of any proven, probable or otherwise oil and gas fields at the current low $40+ barrel oil price coupled with the evaporation of the capital equity markets for junior oil & gas companies.”
Ninkov said Spitfire had decided to look further afield at base and precious metals and minerals projects that may provide the economic return over a long period of time and be more attractive to finance, construct and commission.
In the interim, the retention licence remains in place over the Salmon Gums project until September 2016 project although the project is currently on hold. Spitfire said it will continue to seek potential joint venture agreements for the development.
Recommended for you
