Oil and gas explorer Petsec Energy Ltd (ASX: PSA) reported on Tuesday that it suffered earnings retreat as the drilling moratorium in the Gulf of Mexico continues leading to dismal half year figures for the company.

The company said that it posted $US30.t million or $A34.4 million loss in the year leading to end of June, worsening from last year's loss of $US9.1 million, leading to an underlying result of $US800,000 of losses as against the profit of $US6.1 million posted in the same period last year.

Petsec also revealed that it may implement more productions downgrades if its Main Pass 270 oil field were not cleared to resume operations by September this year.

Company chief executive Terry Fern admitted that the results were disappointing and much of that were due to the uncertain situation in the Gulf of Mexico as he stressed that "the US operations and assets which have been the mainstay of the company are now clouded by politically directed uncertainty following the BP-operated Macondo oil spill in deepwater of the Gulf of Mexico."

Following the widespread oil spill, the US government imposed a moratorium on all oil drilling activities greater than 500 feet below the water level which effectively halted all drilling operations in US waters.

Adding to Petsec's woes is the shutting down of its largest field, the Main Pass 270, due to a damaged onshore pipeline and no definite date has been set for the facility to resume operations.

All these problems largely contributed to the company's net revenues after royalties of only $US15.7 million, sliding from the $US31.8 million that Petsec had netted in the same period last year.

The only encouraging development for the company, according to Mr Fern, is the prospect of its Beibu Gulf project in China, which he described as "assets now spring-like bursting into flower," following its dormancy since 2006.

Mr Fern is also upbeat that the company is set to gain from the anticipated increase in gas prices, which he said would "jump by 20 per cent from where it is now as the economy starts to grow."