First Oil cashes in on rising prices – and invests it in growth

Higher prices helped privately owned Aberdeen firm First Oil grow revenues by 40 per cent in the last financial year, money it has continued to plough into development and exploration.

First, which is the largest privately owned British company producing oil in the North Sea, reported revenue of £73.7 million for the year to 30 April, up from £52.4m a year before.

Operating profit before exchange rate movements was £17m, compared to £16m in 2010, but the firm took a one-off hit of £7.9m for the new tax on North Sea oil producers imposed at the last Budget.

Finance director Steven George warned: “This unexpected increase in the supplementary charge will not have an impact on the short-term cash flows of the company, but will have a significant detrimental effect on future investment decisions.”

The firm, which pumps around 6,000 barrels of oil equivalent a day from 13 fields in UK and Dutch North Sea, said it had been awarded eight exploration licences on the UK continental shelf in the 26th licensing round and expects to secure three more before the end of the process.

The company is headed by entrepreneur Ian Suttie, who is currently ranked 13th on Scotland’s Rich List with an estimated fortune of £340m. But First’s interest in the Kraken oil find east of Shetland could catapult Suttie to the top of the list after it was revealed to have recoverable reserves of 160 million barrels of heavy oil. The company acquired a 30 per cent interest in Kraken when it bought Celtic Oil, a process that was completed in June. It also has a 20 per cent stake in the Bacchus prospect being operated by Apache.

In his statement on First’s accounts, Suttie said the firm had significantly enhanced its asset portfolio.

“Strategic acquisition success and strong organic growth was underpinned by another year of record turnover and robust financial performance,” he said.