PGNiG slips on upstream impairments

Impairing incomes: Polish gas company writes down upstream assets

Polish national gas company PGNiG reported a 4% drop in first-half net income to 340 million zloty ($108 million) despite higher revenues and a jump in oil production as impairments cut the company’s bottom line.

The Warsaw-headquartered explorer said that it made a set of upstream asset impairments after “reviewing the usefulness of licences and exploration work” performed in the past decade, which along with a gas inventory write-down cost $156 million.

PGNiG also wrote off $50 million for eight dry exploration wells, including E.ON’s Terne probe in the Norwegian Sea that proved unsuccessful last month.

Overall revenues rose 5% between 1 January and 30 June to 6.84 billion zloty, with exploration and production delivering more than half the integrated gas company’s ebitda.

Gas output was up slightly on the year-ago period at 1.1 billion cubic metres while oil and condensate output ramped up by 46% to around 2.1 million barrels.

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