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Russia-focused gas producer Volga Gas swung to a first-half loss after asset writedowns more than offset a rise in sales.
Pre-tax losses for the six months through June amounted to $3.0m, compared to a profit of $4.16m on-year.
Revenue rose 22% to $26.3m after production rose 19% to 5,634 barrels of oil equivalent per day.
The combined $5.1m of writedowns included $1.9m of well costs and a $3.2m asset impairment charge relating to an anticipated reserve revision.
For the full year, the company guided for 4,400 barrels of oil equivalent per day.
'Notwithstanding the recent, solid underlying production performance of the group, adverse drilling and other operational issues have impacted overall financial results and future management production guidance,' chief executive Andrey Zozulya said.
'Management is determined to mitigate the expected future lower production guidance.'
'This includes the application of low-cost, slim hole drilling techniques, which have already been successfully deployed on the Uzen field, and apply to up to six attractive exploration targets.'
'The plan is to initially drill two slim hole exploration wells in the Karpenskiy exploration area with four further slim hole exploration wells to potentially follow.'
'Slim hole drilling may also be utilised in the future drilling in the VM field as well as on the Muradymosky licence in Bashkiriya.'
'The unexpected discovery of new reserves in the Upper Aptian layer in the Uzen field is potentially material to management's rebuilding strategy and the Board looks forward to drilling an appraisal well in due course, consequently the Board continues to look to the future with confidence.'
At 1:59pm: (LON:VGAS) Volga Gas PLC share price was -4.5p at 34p