NZPG half year results:
Revenue - $103m, up 8pc
Profit - 53.9m, up 30pc
KEY POINTS:
New Zealand Oil & Gas reported a 30 per cent rise in half-year net profit to $54 million, but expected revenue to fall in the second half.
The company said today that for the six months to the end of December, revenues from ordinary activities were 8 per cent ahead of a year earlier at $103.2m.
The profit result included recognition of a net foreign exchange gain of $19.4m, the company said.
The net profit was after expenditure payable to the Crown of more than $50m - $18.4m in royalties and $32.4m in corporate tax.
With the rapid fall in international oil prices, and production from the Tui field in offshore Taranaki trending lower as expected, revenue was expected to be lower in the second half of the financial year, NZOG said.
But a significant increase in revenue was expected later this calendar year, with the Kupe development, off the coast of south Taranaki, on schedule for full production from the third quarter of 2009.
An annual dividend is to be announced in August in conjunction with the annual results.
Tui, in which NZOG holds a 12.5 per cent stake, produced about 5.6 million barrels in the latest half year, of which NZOG's share was 700,000 barrels.
Tui was on track to meet or exceed the operator's production forecast for the full financial year of 9 million barrels, the company said.
In the past half year NZOG achieved an average sales price of about $150 a barrel, while total production, freight and marketing costs were about $16 a barrel.
During the period, international oil prices and exchange rates were extremely volatile. Tui oil was sold against the regional Tapis benchmark crude, which had ranged from US$152 to US$40 a barrel, while the NZ dollar ranged from US77c to US57c.
Late this year the drilling rig Kan Tan IV was expected to drill at least two exploration wells within the Tui permit area. Any new discoveries could be tied back into the existing facility, NZOG said.
The Kupe development to produce gas, light oil and LPG, was more than 90 per cent complete.
NZOG, which has a 15 per cent stake in Kupe, said that with the three products, Kupe would provide NZOG with a diversified and reliable revenue stream for the next 20 years.
NZOG chief executive David Salisbury said the combination of a strong balance sheet, ongoing production revenue and a diverse portfolio placed NZOG in a strong position compared to many of its peers, which had been hit by the double whammy of falling oil prices and the global credit crunch.
As a result, NZOG was being frequently approached with new business opportunities, ranging from exploration activity, to asset sales, to corporate acquisitions.
"The best of these opportunities are being fully assessed against technical and commercial parameters," said Salisbury.
"We make no apologies for taking our time to ensure this assessment is carried out thoroughly. We are determined to build further value for our shareholders and we will not be taking undue risk or overpaying for any investment."
NZOG shares were up 2c in late morning trading to $1.22, having ranged between $1.08 and $1.91 in the past year.
- NZPA
