NZ Oil & Gas slumps

New Zealand Oil & Gas reported a 45 per cent fall in full year net profit to $53.2 million, as revenue from ordinary activities declined 41 per cent to $138.9 million.

As expected, revenue was lower than in the previous year, which had included the initial high production from the Tui area oilfields, the company said today.

As well as the Tui revenue, the company received a $3.3m dividend from its investment in Pan Pacific Petroleum and recognised a $3.7m foreign exchange gain for the year.

NZOG has a 12.5 per cent interest in the Tui field in offshore Taranaki.

During the year, the company invested around $120m in its existing asset portfolio and in new investment opportunities, NZOG said.

At June 30, its cash balance was $174.8m, and it had no debt.

During the year to the end of June, the Tui area oilfields produced 9.12m barrels of oil, of which NZOG's share of production was 1.14m barrels.

Initial proven and probably reserves at Tui had been upgraded slightly, from 50.1m barrels to 50.5m. At the end of June, 23.3m barrels had been produced from Tui, with an estimated 27.2m remaining to be recovered.

The potential for additional reserves and sustained levels of production from the Tui project was about to be addressed, with the drilling of at least two more wells nearby the Tui field this summer.

An unchanged fully imputed dividend of 5c per share is to be paid.

NZOG also announced today it had entered a conditional agreement to take a 40 per cent stake in the Albacore permit , covering 715sq km in the northern Taranaki Basin about 80km north of New Plymouth, in water depths of around 95 metres.

The permit contained a number of identified prospects and preparations were already in place to drill one of those prospects, NZOG said.

The well was expected to be drilled in October and November at a total estimated cost of $20m to $25m.

- NZPA