Genesis Energy Chairman Mr. Terence Kong said: “Despite the unfavourable economic environment and challenges, we were able to sustain solid growth momentum for our core oil and gas exploitation business. During the year, our crude oil production reached 45,000 barrels, representing a significant increase from 9,000 barrels produced in 2008.”
The economic setback of 2009 provided a window opportunity for the Group to proactively adjust its business portfolio by divesting from non-core businesses and focusing on the development of core oil and gas operations. Such efforts included the disposal of its 72% interest in the natural gas pipeline network operations in Xinjiang, the PRC in May 2009.
In February 2009, the Group acquired Liu Luo Yu Oil Field (柳洛峪油田) exploitation project located in Ganquan County in Shaanxi Province (陜西省甘泉縣), the PRC. The oil field currently has close to 100 wells with a steady monthly output of 3,500 barrels. In September 2009, the Group acquired a further oil and gas oil exploitation project in Yanjiawan, Shaanxi Province (陜西省閻家灣), which currently maintains a steady monthly output of 2,500 barrels from 58 wells. The Group plans to further develop these two projects at appropriate times.
In the United States, the performance of the Grassy Trails oil field in Utah was affected by the extensive maintenance and environmental protection works undertaken in 2009. Conditions are expected to improve in 2010. The Squaw Canyon oil field in the Four Corners Area has been operating effectively to contribute steady income for the Group.
To further enhance the management efficiency of its US oil and gas assets, the Group entered into a letter of intent in June 2009 with US OTC company Bayhill Capital Corporation with a view to seeking feasible solutions to better manage and optimize the operations of Grassy Trails.
Mr. Kong continued: “The significant rebound in the Brent Crude price has not been fully reflected in the regulated PRC market, but further room for upward adjustment is anticipated for the domestic crude oil price as international prices continue to increase steadily on inflationary and USD depreciation expectations. We maintain a cautiously optimistic outlook for our ongoing development and will continue to pursue appropriate investment opportunities in upstream oil and gas projects. We will also deploy scientific measures to stabilise and enhance the output of our existing oil fields. The board and management are confident of a steady growth of our core businesses in 2010.”
The Group maintains a sound financial position with a gearing ratio of 0% (2008: 0%) based on total assets, and a current ratio of 0.8 (As at December 31, 2008: 2.1). The Group expects the financial conditions to improve steadily on cash flow contributions from its upstream businesses and the completion of the placing of new shares.
Financial Highlights| Year ended December 31, | ||
| 2009 | 2008 | |
| RMB '000 | RMB '000 | |
| (restated) | ||
| Continuing operations | ||
| Turnover | 15,155 | 4,206 |
| Gross Profit | (5,086) | (1,914) |
| Loss from continuing operations | (32,940) | (40,244) |
| Discontinued operations | ||
| Profit/(Loss) from discontinued operations | 14,015 | (99,904) |
| Loss for the year | (18,925) | (140,148) |
| (Loss)/Earnings per share - Basic | ||
| - From continuing and discontinued operations | HK (0.43) cents | HK(3.31) cent |
| - From continuing operations | HK (0.75) cents | HK (0.95) cent |
| - From discontinued operations | HK 0.32 cents | HK (2.36) cent |
| As at December 31, | ||
| Gearing ratio | 0% | 0% |
| Current ratio | 0.8 | 2.1 |
About Genesis Energy Issued by : Through :
Genesis Energy Holdings Limited (HKEx: 702) is an energy company with a key focus on oil and gas, as well as other renewable sources of energy. The Group is committed to building a diversified portfolio of energy assets and operations with an aim to developing into one of the leading independent energy businesses in Greater China. The Group currently operates oil and gas fields in the US and the PRC.
Genesis Energy Holdings Limited
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