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Be the first with the news that moves the market- Petroleum company, Paramount Resources (TSX:POU) reduced its annual net loss to C$31.1 million in 2019
- This is a considerable reduction from the C$170 million net loss Paramount reported in 2019
- The company credits a continued focus on cost control at its Karr and Wapiti oil wells as the reason for the reduction
- The company also stated that unplanned well outages and uncertainty in the oil price may adversely affect Paramount’s 2020 performance
- Paramount Resources (POU) is down 8.03 per cent, with shares trading at C$3.78 and a market cap of $507 million
Petroleum company, Paramount Resources (TSX:POU) shrank its annual losses last year to C$31.1 million, down from over $170 million in 2018.
The company credits a continued focus on cost control at its Karr and Wapiti oil wells as the reason for the substantial reduction.
Looking forward, the company’s budget for 2020 is expected to be around $400 million. Over the next year, Paramount will further develop the Karr and Wapiti wells in Alberta. The development includes drilling 22 new wells at Karr and Wapiti.
However, the recent drop in oil prices means Paramount may need to modify its capital cost throughout 2020.
Oil prices remain uncertain due to the ongoing COVID-19 crisis. As a result of the global instability, Paramount stated it may divest from assets or investment to reduce debt or fund operations. Paramount did not state which assets would be sold if this action was required.
Last month, The Wapiti well was halted due to a technical fault. Consequently, the whole operation was out service for two weeks.
This outage is expected to heavily impacted the wells quarterly production. A further seven-day outage at Wapiti is scheduled in March.
Paramount plans to install compression and pumping technology to the wells in the second half of the year to limit further unforeseen outages.
Since the begging of the year,Paramount’s share price has dropped by almost 50 per cent.
In related news, the company has appointed Paul Kinvig as the new Chief Financial Officer. Kinvig has been with the company for 15 years and most recently served at Vice President of Finance.
Paramount Resources (POU) is down 8.03 per cent, with shares trading for C$3.78 at 12.21pm EST.
