Global Energy Development (LON:GED) reported today a pre-tax profit slump in 2009, attributable to volatile and consistently low oil prices. In a separate announcement today, the company announced their three year plan to increase production volumes.
Global Energy Development is a petroleum exploration and production company focused on Latin America, where they pursue a long-term strategy of finding and developing reserves. The company holds 100% of all contracts and rights to explore for and/or produce oil and gas from a geographically diversified portfolio of prospective acreage in Colombia, Peru and Panama.
According to the report, profit before tax for the year plunged to $2.70 million from $9.92 million in the previous year. Revenue for the twelve-month period declined substantially to $22.17 million from $32.80 million the year earlier, pushed down principally by depressed oil prices. The average West Texas Intermediate or WTI price used in sales invoices by the company was $61.08 per barrel compared to $88.55 per barrel before. Production for the year was 401,700 barrels of oil, lower than 438,007 barrels of oil in the prior year.
The stated objective of the three-year plan is to increase production volumes while developing the company's reserve base and to increase drilling activity. The plan includes drilling of 13 strategically located wells, plus one well re-entry, two accompanying seismic acquisition programmes and the construction of facilities. The wells to be drilled were selected from over 1,000 potential drill sites by the independent petroleum engineers Ralph E. Davis Associates after re-evaluating all technical data. The engineers reportedly selected the wells with the purpose of trying to move the majority of the company's current probable and possible reserves into the proved reserve category whilst significantly increasing daily production volumes.
The total cost of the Plan is estimated at approximately $110 million and is anticipated to result in combined new production of approximately 9,000 barrels of oil per day net to the Company in addition to moving an additional 200 million BOE to proved reserves by the end of 2012. Global Energy Development owns 100% interest in all its wells.
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