CNR North Sea Reports £85.7m Pre-Tax Loss

CNR North Sea Reports £85.7m Pre-Tax Loss

CNR North Sea Reports £85.7m Pre-Tax Loss

The subsidiary of Canadian Natural Resource Ltd said cost of sales in the 2014 year were £453.8m, which included £146.7m for depletion of assets, which pushed down overall operating losses to £95.4m

North Sea oil firm Canadian Natural Resource (CNR) has reported an £85.7 million pre-tax loss for the 2014 year to December 31 as turnover dipped 14 per cent to £371.8 million.

The subsidiary of Canadian Natural Resource Ltd said cost of sales in the year were £453.8 million, including £146.7 million booked as depletion of assets, which pushed overall operating losses to £95.4 million.

CNR International (UK) Ltd, which employs 400 people onshore in Aberdeen and 2,500 offshore across operations in the North Sea and Africa, had reported pre-tax losses of £156.1 million for the 2013 year on turnover of £430.7 million.

The 2013 losses included a £308.3 million asset depletion charge for the Murchiston Field prior to cessation of production.

The company said 2014 turnover was down on the prior year as average production had fallen to 15,100 barrels of oil equivalent per day (boepd) down from an average of 17,300 boepd in 2013.

The average price per barrel equivalent in 2014 was $98 a barrel, down from $113 in 2013.

The company also notes £13.5 million of other operating expenses were incurred in the 2014 year, “mainly comprising exchange losses on foreign currency borrowings of £12.2 million”.

In January Calgary-based CNR announced it was slashing its 2015 expenditure budget by £1.6 billion to £4 billion as a result of the fall in global oil prices.

Last December CNR International vice-president and managing director of the Aberdeen-based UK and Africa-focused business, James Edens. warned the group would shift investment to other areas of the world because the UK government wasn't moving quickly enough to change the tax regime for oil and gas operators.

In 2014 accounts now filed with Companies House, CNR International (UK) Ltd notes an £18.5 million tax gain on ring-fenced profits and £34.9 million in accelerated capital allowances, an with other tax reliefs booked an overall tax credit of £27.4 million for the 2014 year, leaving overall losses at £17.9 million.

In March of this year, the UK Government reduced the supplementary corporation tax charge for UK North Sea oil producting countries from 32 per cent to 20 per cent, effective January 1, 2016.

CNR International (UK) Ltd said had the new rates been enacted at the balance sheet date, the company's deferred tax liability would have been reduced by £45 million (unaudited) and retained earnings would have increased by the same amount.

The company notes in 2014 accounts it paid £90 million in dividends to its parent company in the 2014 year (2013: nil).


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