KEY POINTS:
New Zealand Oil & Gas was wise in not trumpeting too loudly the huge profits it made from its Tui field when oil hit US$147 ($277) a barrel in the middle of the year.
Publicly anyway, NZOG was empathetic with the rest of New Zealand punished by record oil prices.
The Tui project was sanctioned in 2006 when oil prices were around US$50 a barrel but it has fallen to as low as US$47 this week, as the global economic outlook has worsened and Opec has postponed a decision on whether to cut supplies until December 17.
While the outlook is not so sweet for the company with oil falling a full US$100 per barrel, it did benefit from having maximum production running from Tui when oil prices were high.
At the end of October the company broke down costs which showed if it sold a barrel of oil then for $120, the production expenses were around $17, marketing costs $7, depreciation and amortisation $16, royalties $16 and tax $19, leaving around $45 in profit.
Royalties and tax fall when returns do but the picture does not look so bright with the price around $88 a barrel.
Analysts say there's a long way to go before NZOG and its partners would consider pausing the Tui operation.
New Zealand Oil & Gas shares closed at $1.28 yesterday.
