Independent Oil and Gas reports a post-tax loss of £1.06 million for the first six months of this year compared with a loss of £0.20 million last time and a profit of £5.32 million for full year 2015.
The latest period loss includes charges of £0.34 million for other administrative expenses (1H 2015 - £0.18 million), exploration costs of £0.17 million (1H 2015 - £0.01 million), share-based payments of £0.27 million (1H 2015 - £0.20 million) and an exchange loss of £0.16 million (1H 2015 - £0.02 million gain) plus finance expenses of £0.12 million (1H 2015 - £0.17 million gain).
IOG also announced the initial results from its first operated appraisal well on the Skipper oil discovery which lies in Block 9/21a in licence P1609 in the Northern North Sea.
IOG, which is 100% owner and operator, said that although the oil is moving in the reservoir, the first sample results indicate that the oil is approximately 11degrees API and has a significantly higher viscosity than expected.
It says: "These measurements do not align with our observations and therefore the remaining samples need to be reviewed and tested. Next steps will then be Reservoir modelling to consider potential development options. Determining commerciality may therefore take several months."
It says the quality of the sands, although not cored, suggest permeabilities in excess of 10 Darcies, significantly better than previously assumed.
As the crest of the Skipper reservoir in the appraisal well was found to be 44ft shallower than prognosed, management's estimate of the most likely oil in place has increased from 136.5 million barrels ("MMBbls") to 142.6 MMBbls.
Chief executive Mark Routh said: "The analysis of the oil retrieved from the appraisal well indicates that Skipper is a heavy oil discovery with similar gravity to other nearby heavy oil fields.
" We have observed that the oil moves in the reservoir and is mobile at surface at ambient conditions. The initial oil analysis results are incompatible with our observations, therefore we are now reviewing our strategy to establish the commerciality of Skipper.
"In addition, we have an increased oil in place, higher observed reservoir permeabilities and an increased reservoir height from the crest to the oil water contact.
"Drilling our first well as operator was a very important step for IOG and we now have an excellent portfolio of assets, comprising of one-third oil and two-thirds gas. This is subject to completion of the Vulcan Satellite fields acquisition, which is expected in short order."
At 8:23am: (LON:IOG) Independent Oil Gas PLC share price was -8.38p at 19.13p