Dart Energy pulls out of China for US$12m loss

dart loses on china deal copyScottish Driller Dart Energy today announced the company is pulling out of operations in China – for a US$12m loss.

The company is selling its stake in Fortune Oil Plc (FLG), which has extensive Coal Bed Methane (CBM) operations in China.

In 2009 the company bought 35% of FLG for US$19,730,000 (see Dart’s Financial Accounts for 2012, p133). A year later Dart increased its shareholding, paying US$8.7 for the privilege.

In December 2011, Dart exercised its option to increase its stake in FLG from 45% to 50% for an additional investment of US$4m, bringing the total cash that Dart has sunk into its China enterprise to $US32.4m

Dart today announced it had sold its Chinese its stake in FLG‘s coal-seam-gas prospects to for about US$20.8 million, netting the company a loss of US$11.6m.

Earlier this year the besieged driller pulled out of Australia after large-scale protests against the company’s controversial drilling operations.

Dart now wants to concentrate its efforts in the UK. where, it says, it wants to “focus the business on our extensive high prospect shale and CBM acreage”.

Yet Dart’s plans to drill in Airth, Scotland have come to a grinding halt in the face of wide-scale public objections. Airth Council recently refused to make a decision on a plan by Dart to drill 22 wells, where the company’s planning application has been stalled for nearly a year.

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