Gulfsands Petroleum Plc plans to diversify beyond the Middle East and North Africa after the U.K. oil explorer failed to complete acquisitions in the region to counter the loss of business following the civil war in Syria.
“Our focus is on the Middle East and North Africa,” the company said today in its first-half results statement. “We will look, however, to diversify outside the MENA region.”
After studying more than 50 opportunities in the region and some countries beyond, Gulfsands said most failed to add value, would use too much cash or excessively dilute shareholdings. “In certain cases we have progressed to making offers,” it said. “But as at the date of writing, we have not progressed any of these opportunities to a position of certainty.”
Gulfsands stopped exploration and production in Syria in December after an uprising in the country, and sanctions imposed on the company’s domestic partner in the Block 26 Production Sharing Contract. It has 50 percent of the block in northeast Syria, currently operated by the General Petroleum Corp. The company has also failed to find a buyer for its maturing oil and gas assets off Texas and Louisiana in the Gulf of Mexico.
“The group has struggled to attract bids that sufficiently value the assets,” it said. “The group will continue to actively market the portfolio and consider other alternate divestment strategies during the remainder of the year.”
Gulfsands today posted an $8.6 million loss for the first half after profit of $60.4 million a year earlier, while sales in the half year collapsed to $2.9 million from $78.6 million.
The company fell 3 percent to 122.25 pence by 12:55 p.m. in London trading, bringing its loss for the year to 34 percent.