Island Oil & Gas in profit!

Tuesday October 7, Island Oil & Gas Plc (IOG.L: News) reported profit before taxation of GBP 12.41 million in its preliminary results for the full-year 2008, compared with a loss before taxation of GBP 4.99 million in the last year. Earnings per share were GBP 0.1082 in comparison with a loss of GBP 0.0613 in the previous year.

Operating profit averaged GBP 13.11 million, compared to an operating loss of GBP 4.45 million in the prior year. Annual revenue increased to GBP 2.25 million from GBP 1.76 million, a year earlier. Gas revenue improved for the third year in succession and represented a 28% increase year on year.

The company said that this year's profit relates mainly to the sale of Island Netherlands BV, a wholly owned subsidiary, and to the sale of a 10% interest in the Amstel oil field development in the Netherlands to Encore Oil.

Report for black-September 2008

Make no mistake, the global financial turmoil affects us too! However, there are suggestions in this month's report that our new strategy might be beginning to pay off.

The FTSE100 fell 13% in the month to September 30, the lowest for several years. However, our portfolio fell "only" 8% and the Unit Value was "only" 4% lower. We have 30% of our assets in cash (earning interest), and our diversified portfolio contains bonds that are somewhat less sensitive to the vagaries of the market.

This is not to minimise the extent of our losses. Note that the Unit Value is well below 100: i.e. we are showing an overall loss, our assets being worth less now than we have paid in (less withdrawals).

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