New Zealand Oil and Gas (NZOG) will pay a dividend for the third consecutive year – despite a net loss after tax of $3.3m in the year to 30 June 2010.Last year, the company reported an after tax profit of $53.2m, largely driven by the ongoing succes
New Zealand Oil and Gas (NZOG) will pay a dividend for the third consecutive year – despite a net loss after tax of $3.3m in the year to 30 June 2010.
Last year, the company reported an after tax profit of $53.2m, largely driven by the ongoing success of the Tui area oil fields, in which NZOG holds a 12.5% stake.
This year’s results reflect a predicted decline in yield from Tui and a significant increase in exploration expenditure.
Total operating revenue this year sits at $99.4m, down 28% on last year.
Gross profit from operating activities was $67.6m, including $30.7m of exploration costs, unrealised exchange rate losses of $8m and a $11.5m share of associate company Pike River Coal’s loss.
Cash flow remains relatively strong at $142.4m total and $79.6m net, and the company will pay a dividend of five cents per share.
Tui in decline
The Tui area oil fields continue to decline. Approximately 22m barrels in proved and probable (2P) results remain, with NZOG’s share at about 2.75m barrels.
Production from Tui this year slightly exceeded expectations at 4.83m barrels, with NZOG’s share at 604,000 barrels, equating to sales revenue of $67.9m.
The Kan Tan IV drilling rig is currently being employed to bring one of the four Tui wells back into production after a shutdown for repairs.
Kupe upgraded
The Kupe field began producing in December last year and is now in full commercial production, with reserves upgraded by 8% for gas, 5% for LPG and 27% for light oil, the most valuable of the three products.
In the second half of this financial year, NZOG’s 15% stake in Kupe provided $31.4m in revenue – and is expected to continue as a significant income stream for the next 15-20 years.
Looking offshore
NZOG's busy drill season this year was disappointing, with four wells drilled in offshore Taranaki - Albacore, Hoki, Tui Southwest and Kahu – failing to turn up commercial discoveries.
NZOG signalled today that it is looking offshore for new opportunities - though it stresses that New Zealand remains an attractive investment destination.
The company aims to establish one or two new core areas, additional to offshore Taranaki, and has assessed a range of potential overseas investments over the last year.
NZOG hopes to progress one or more of these opportunities in the current year.
No decision has been made regarding NZOG’s 29.4% stake in Pike River Coal, which it has previously stated will be sold off when the time is right.
