Heritage Petroleum records $1b profit for 2020

Heritage Petroleum has recorded a little over $1 billion profit for 2020.

Chairman Michael Quamina said in the summary consolidated financial statement for year ending September 30, that the revenue generated for the period was done over a 12-month period and under the impact of the covid19 pandemic, when compared to 2019.

“Revenue for the 12 months of 2020 was $4.7 billion vs $5.4 billion for the 10-month period in 2019. This was a consequence of substantially lower prices on the international market for our crude.”

Quamina also noted that in 2020 the price of West Texas intermediate traded as low as US$37.63 and Brent crude as traded at a low of US$20 per barrel.

Considering the global changes, he said, Heritage Petroleum was able to prevent losses through quick and strategic responses in its operating costs.

“Heritage was able to respond quickly and strategically by lowering its operating costs and deferring discretionary projects, implementing storage as opposed to sale of crude — which avoided the loss of hundreds of millions of dollars in the worse part of the price decline — and resuming sales when the price recovered.

“Consequently, profit for the year 2020, nevertheless exceeded $1 billion ($1,011,860), compared to $1.4 billion for the 10-month period in 2019 when our realised prices averaged in excess US$61 vs a realised price of US$42.21 in 2020.”

Quamina said while operating in a lower price environment it was a commendable performance and the company was also able to fund a $500 million capital programme in drilling and workovers, asset integrity and infrastructure and IT upgrades; replaces 165 per cent reserves; continued growing production; settled all debt obligations; and contributed $905 million in taxes, royalties and levies.

On Saturday prices for WTI crude was US$74.05 and Brent crude was US$76.18, a rapid increase in the past few months.