Europa Oil & Gas reduced its losses in the year to the end of July despite revenues being hit by the fall in the price of oil.
Revenue fell to £1.3m (2015: £2.2m) but the group reports a 33% reduction in cost of sales from lower operating costs and 39% reduction in administrative expenses from non-recurring 2015 items and other savings.
The group posts a pre-tax loss excluding exploration write-off and impairment of £0.7m (2015: loss £0.8m) and a pre-tax loss of £1.9m after £1.2m exploration write-off in Béarn des Gaves (2015: loss £4.1m after £2.2m exploration write-off in PEDL181 and £1.1m impairment against the West Firsby field).
The group reports a post-tax loss for the year £1.6m (2015: loss £1.8m).
Chief executive Hugh Mackay said: "In the face of difficult market conditions for the oil and gas sector we have delivered strong performance. We have reduced costs by one third, our UK production is set to double, we are preparing to drill a high impact well onshore UK at Holmwood, we have delivered three deals, landed seven new licences in the UK and Ireland and perhaps most importantly built a leading position in Atlantic Ireland.
"The tide is turning in Atlantic Ireland: the 2015 Licensing Round was the most successful licensing round ever in Ireland. Major oil companies are back and have already begun substantive work programmes.
"This is a remarkable outcome given sub $50 oil prices and in due course we expect that this activity will likely result in exploration drilling. We will continue to mature our Irish portfolio with the intention of delivering half a dozen drill-ready prospects – any one of which has the potential to be a company maker for Europa."