Offshore Hydrocarbon Mapping (OHM) piled on the misery for shareholders with news that losses tripled in the first half as a result of difficulties persuading oil and gas firms to adopt its innovative exploration technology.
Shares in Aberdeen-based OHM tumbled by 5% after the company said pre-tax losses soared to £4.03m in the six months to February 29, compared with £1.25m in the equivalent period last time, as the company grappled with what directors described as "difficult and testing trading circumstances".
While directors claim that the company's electro-magnetic imaging techniques can significantly reduce the risk of drilling dry wells, OHM operates in an industry in which many firms are slow to adapt new technology.
It was hit hard in the first half by delays in winning consent to use its techniques in "various international jurisdictions".
OHM had hoped to win significant business in Asia and Africa in winter to offset a seasonal slowdown in areas like the North Sea.
However, after sending a crew to Asia to work on a large programme at considerable cost, OHM had to call off the operation as a result of the failure to secure permits for the work involved.
With the company completing no large survey programmes over the winter, first-half sales fell from £7.6m last time to £4.7m.
The latest reverse for investors comes three months after shares in OHM plunged by 40% in one day after the exploration technology firm warned performance would fall "significantly short" of expectations.
Following a 3.5p fall in OHM shares yesterday the stock closed at 70p. That compares with a price of 175p before the profit warning in January. The company's capitalisation has fallen from £75.6m in January, to £30.2m yesterday. As a result OHM may face an uphill struggle to rebuild investor confidence.
"Nobody is happy with the share price where it sits," admitted Dave Pratt, executive chairman.
However, asked whether any shareholders had cast doubt on the viability of OHM as an independent business, Pratt said: "None that I have heard of.
"Nothing has changed. We have to make technology adoption happen faster than it has been doing, but the fundamentals remain the same."
Pratt said a strategic link-up with CGGVeritas, the seismic surveying giant that took a 15% stake in OHM last July, at 240p per share, should start to generate increased sales shortly.
The company hopes to announce the result of some big contract tenders in coming months. Pratt said he was confident OHM will win the consents required to operate in key territories in due course.
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