"Despite growing average annual production in Canada by 71% to 703 bopd, enabling a 154% increase in revenues, the board uncovered significant unbudgeted cost overruns,” Aitken said in a statement accompanying the firm's full-year 2018 results.
He added: “Since joining as CEO in June 2018, I made it a priority to comprehensively upgrade the company's financial planning, reporting and controls processes.
“The board is currently in advanced discussions to secure both short-term funding from its shareholder H2P and has also engaged a specialist financial advisory firm to source Canada asset-level debt financing to ensure that Cabot Energy is fully funded to commence its 2019 summer work programme and support the growth of the business.
“The heavy lifting has now been completed and, provided we secure appropriate financing, we believe we will be in a greatly improved position to deliver sustainable value for all shareholders from our contrasting portfolio of production and exploration assets."
Operations and financials
Cabot’s gross production averaged 703 barrels of oil per day (bopd), up 71% from the 411 bopd reported a year ago, meanwhile, crude sales prices improved too with the average up 10% marked at US$47 per barrel for 2018.
The company generated some US$12.2mln of revenue, up by around 154% from US$4.8mln in the preceding twelve months.
Gross profit in Canada amounted to US$3.9mln, up from US$0.34mln in 2018, meanwhile, the group reported a US$6.2mln loss before tax.
Cash constraints mid-way through 2018 meant that Cabot's management had to cancel its planned summer programme of work and consequently production in the field reduced in the second half, with the second half average marked at 645 bopd compared with 761 bopd in the first half of 2018.
In January, the company raised US$15.5mln via an issue of equity, and, it ended the year with a US$0.9mln cash balance. More recently, in the current financial year, the company raised US$3.4mln via a share placing in March.
Production averaged 511 bopd during the first quarter and it generated US$2mln of revenue in the three months, down from US$3.4mln in the 2018 comparative period.
Amid an ongoing nationwide moratorium on hydrocarbon activity in Italy, Cabot's management decided to simplify the strategy and focus on Canada. The aim is build cashflow to support a move towards a dividend policy.
“From an operational standpoint, we achieved a 339% reserves and resources upgrade in Canada with a 282 well location inventory, underlining our confidence to deliver sustainable production growth,” said CEO Aitken.
“In Italy, an independent resources report reinforced the group's belief that we have a leading position which offers world-scale, high-impact exploration potential.
“The key now is to optimise the potential of our assets by adopting a managed, lean approach. To this end, we are encouraged that our renewed focus on financial and operational discipline has successfully reduced production costs to less than US$20/bbl.”