Molecular Energies PLC on Wednesday reported a widened loss and lower revenue after a ‘challenging’ year, but said the future appeared ‘a tad brighter’ with recent activities seeming to promise more stability.
The company also announced that it intends to ‘spin out’ and start an initial public offering for Green House Capital, its alternative energies division.
Molecular Energies, formerly known as President Energy PLC, is an Argentina and US-focused oil and gas production company. It has additional assets in Paraguay.
The company swung to a $12.2 million pretax loss in 2022, compared with its $5.7 million profit in 2021. Revenue for the year was $33.2 million, down 2.7% from $34.1 million, while adjusted earnings before interest, tax, depreciation and amortisation decreased 8.0% to $6.9 million from $7.5 million.
Molecular Energies said production in Argentina decreased 30% to 1,656 barrels of oil equivalent per day, from 2,379 per day the year before. US production fell by 44% to 53 barrels per day from 94 per day.
These affected financial returns, Molecular Energies said, as did the company’s difficulty in benefitting from increased worldwide oil prices. This was due to price controls in Argentina and restricted access to export markets.
‘The year under report was challenging and volatile in certain ways, rewarding in others and, considering all the circumstances, the results were sound,’ said Chair Peter Levine.
‘However, activities since the start of the year point to a more stable future and there is potential for some exciting developments in the group as a whole going forward.’
Also on Wednesday, the company announced IPO plans for its alternative energies division Green House Capital.
It said the unit’s ‘significant progress’ gave it confidence that Green House will attract new investors focused on energy, and gain a valuation which cannot be fully recognised while it remains part of Molecular Energies.
Levine added: ‘These are exciting times for Green House. The next months will be transformative including developing existing businesses, maturing the opportunity pipeline as well as developing its own management and skills base. In considering opportunities, we not only look at the subject matter but the need for near-term revenue generation and prospects for monetisation of value.’
The company also said Green House is in advanced negotiations to increase its stake in Dual Fuel Ltd from 50% to 100%, and has entered a framework co-operation agreement with infrastructure consulting firm Aecom.
Molecular Energies said that overall, its outlook ‘is looking a tad brighter’. This was due to ‘good traction’ and new elections in Argentina and plans for two new high-impact wells, as well as to Green House’s ‘material progress’. Regardless, the company said that ‘one has to be severely realistic as to the chances of success in exploration wells’.
Shares in Molecular Energies were down 1.7% at 124.79 pence in London on Wednesday.
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