CEO Interview: Independent Resources (LON:IRG) aiming for low cost production

With the company already receiving revenue from Egypt, and with future oil opportunities in both Egypt and Tunisia, Greg Coleman, CEO of Independent Resources, joined Zak Mir on the Tip TV Finance Show to discuss the future for IRG.

What does the next year hold for independent Resources?

Firstly, Coleman outlined that IRG are already producing 200 barrels of oil per day, which helps pay the costs for the firm, but with the current low oil prices, this doesn’t offer much to reinvest into the business. The main strategy for the future involves lowering costs, and Coleman believed that $10 a barrel breakeven was possible for the company which would enable them to deal with the volatile and recent low oil prices. This was highlighted in the last 6 months, where Independent Resources experienced a 30% fall in cost and renting of their drilling rig in Egypt. When concerning Egypt, the future holds the potential for 1-2 new wells being drilled, which Coleman hoped would be in line with some degree of oil price recovery. In terms of Tunisia, he noted their exploration licence and need to find a farming company to partner with. However, Coleman realised the current geopolitical events are slowing things down, and thus IRG has to be patient. He concluded by highlighting their strong, experienced and very much hands-on team, as well as the real potential in both Egypt and Tunisia.

Oversupply in the market is going anywhere

He continued to the OPEC meeting today, where he expected no action and the continuation of countries and firms trying to undercut and outlast one another. Coleman commented that some stability in the oil price would help, identifying the $50 a barrel level. He concluded that the world has vast storage of oil across the world, and this oversupply isn’t disappearing anytime soon despite the continuing high demand for it.