New Zealand Oil and Gas yesterday reported a 187 per cent increase in its June year net profit to $6.6 million.
In line with its normal policy, it did not pay a dividend. However, the company has said it may resume payouts in the 2008 year, as itbenefits from strong cashflows from the Tui oil field, which began production after its financial year ended.
The company is a junior partner in Tui as well as the Kupe oil and gas field, due to begin production in 2010.
It also has interests in exploration permits and owns 34.6 per cent of recently listed West Coast coal miner Pike River Coal.
The profit came after writing off exploration costs of $3.7 million.
Revenue for the year jumped to $18 million from $7.5 million. This included a $4.6 million gain from sale of part of its holding in Pike River and an $8 million gain on the sale of its stake in Pan Pacific Petroleum.
It also includes interest income of $2.3 million and a foreign exchange gain of $2.7 million. During the year, NZOG group invested $110 million in its three development projects, the Kupe gas/condensate field, Tui oil and Pike River Coal. At June 30, it held cash of $35.4 million.
Since balance date, production at Tui had begun and the Pike IPO had been completed. Tui oil fields began producing at 47,000 barrels a day on July 30 and that was expected to crank up to 50,000. Six 300,000 barrel shipments had been sold to date, two of which have been shipped to market.
Proved and probable reserves for the Tui area oil fields were 32 million barrels, up 15 per cent over reserves reported before drilling.
At current oil prices and exchange rates, the increase is expected to add about $50 million to revenues, with only minor increased costs.
NZOG shares closed yesterday at $1.03, down 2c. The stock has increased nearly 10 per cent so far this year, compared to a flat performance for the benchmark NZSX-50 index.
