Sherritt's Cuba oil revenue plummets

Canadian mining and energy company Sherritt's first quarter oil and gas revenues were down 49% year-over-year to Cdn$18.1mn (US$14.1mn), mainly due to a 63% fall in oil production in Cuba and the associated 54% drop in revenue.

Production declined from 15,213b/d in 1Q17 to 5,572b/d due to the expiration of the Varadero West production sharing contract in November 2017, natural reservoir declines and the lack of fresh development drilling, according to the company report. Cuba revenues declined from Cdn$32.1mn to Cdn$14.7mn in the same period.

Reduced production also increased cost per barrel in Cuba by 141% to Cdn$20.83/b from Cdn$8.66/b in 1Q17.

Sherritt plans to resume drilling in July as part of its deepwater block 10 drilling program and expects the US$13mn investment will produce first results for 3Q18. The company also extended production sharing agreements at Puerto Escondido/Yumuri for three years to 2021.

The company's Q1 net loss shrank to Cdn$0.6mn from Cdn$72.6mn.

The Canadian group also is the largest independent energy producer in Cuba.