North Sea explorer Sterling Resources has posted wider second-quarter losses, saying delays and cost increases for its Breagh gas project were intensely frustrating.
The Canadian group – subject of a £123million takeover bid by a commodity trading group earlier this year – said net losses in the three months to June 30 totalled £12.2million, compared with a £4.3million deficit 12 months earlier.
Sterling had to resort to a series of refinancing deals after delays and cost overruns for the southern North Sea Breagh project.
These included a loan from Dutch group Vitol, which in February made an unsolicited bid to take over the business.
In its latest results statement, Sterling said: “The delays and cost increases at Breagh have been intensely frustrating for shareholders, bondholders and all of those associated with Sterling.”
Chief executive Mike Azancot said: “With our balance sheet strengthened and Breagh production and cash flow imminent, the company is now well positioned to pursue the exploration and development of its attractive portfolio of assets.”
Sterling said first gas sales from Breagh were hit by further delays after the end of the quarter and output from phase two would come “no sooner than late in 2016”.
It added an exploration well on the Beverley North Sea prospect could not be drilled this year because of a very tight rig market.