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PA Resources Drops on Congo Field Write Downs: Stockholm Mover

Jan. 24 (Bloomberg) -- PA Resources AB, an oil and gas exploration company focused on Africa and the North Sea, fell the most in three months in Stockholm after announcing write downs of as much as 1.85 billion kronor ($274 million) after taxes.

The share declined as much as 16 percent, the biggest drop since Oct. 26, which made it the second-biggest decliner on the OMX Stockholm All Share index. The Stockholm-based company traded 12 percent, or 0.28 krona, lower at 2.06 kronor as of 3:05 p.m. PA Resources shares lost 72 percent of their value last year.

The biggest write down, of as much as 1.55 billion kronor, is a result of a lowered reserve estimates in the Republic of Congo, mainly the Azurite field, the company said today in a statement. PA Resources will also make write downs in Tunisia. The company said Jan. 9 that the daily average production was 8,400 barrels in the fourth quarter. It was 12,100 on average in the corresponding period in 2010, a statement from Jan. 7, 2011, showed.

“As previously reported, oil production at Azurite Field did not reach expected levels in 2011 and as a result a corresponding, substantial reduction in reserves now leads to this impairment,” Chief Executive Officer Bo Askvik said today.

The Tunisian write downs result from the suspension in October of a well at the Didon North field and PA Resources agreeing to sell the interests in the Ezzaouia and El Bibane fields to Candax Energy Inc. for $4 million, which was announced Jan. 2.

The company had a third-quarter net loss of 114 million kronor compared with net income of 139 million kronor a year earlier.

To contact the reporter on this story: Janina Pfalzer in Stockholm at jpfalzer@bloomberg.net.

To contact the editor responsible for this story: Christian Wienberg at cwienberg@bloomberg.net.

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