NZ Oil & Gas turns to 1H profit on smaller Pike charges

NZ Oil & Gas turns to 1H profit after year-earlier Pike charges

Feb. 22 (BusinessDesk) – New Zealand Oil & Gas turned to a first-half profit on reduced impairments from the failed Pike River Coal venture and improved revenue from the Kupe and Tui oil fields.

Net profit was $2.3 million in the six months ended Dec. 31, from a loss of $99 million a year earlier, when the company took Pike-related impairments of $98.6 million. Sales rose 35 percent to $54.6 million, just below the $55.5 million estimate from brokerage Forsyth Barr.

NZOG took a further $22.2 million impairment against the value of its remaining Pike River debt, reflecting “the ongoing cost of the receivership, the highly conditional nature of further receipts and uncertainty regarding timing,” it said in a statement today.

The Kupe field is NZOG’s biggest cash generator, contributing $37.1 million in sales and $14.4 million in earnings before interest and tax in the first half. The Tui field, where reserves are in decline, had sales of $17.5 million and EBIT of $9.4 million.

NZOG has a 15 percent interest in Kupe and its share of production was 1.45 petajoules of gas, 6,300 tonnes of LPG and 139,000 barrels of light oil in the first half. Tui, which is 12.5 percent owned, provided NZOG with 148,000 barrels of oil, it said.

The company is looking to build its energy reserves, and is currently in the hunt for a joint venture partner for its Kakapo prospect in the southern offshore Taranaki basin. It is also looking for another partner for the Barque joint venture in the offshore Canterbury Basin. Both these permits have ‘drill or drop’ deadlines later this year.

In Tunisia, where the company won a prospecting permit over 1,236 square kilometres in the Mediterranean’s southern Gulf of Gabes, which is surrounded by discovered and producing oil and gas fields, the company completed a 2D seismic survey this month. The data is still being processed.

The company also has several study agreements and an exploration permit in Indonesia.

“We are very actively pursuing further opportunities in all three of our core areas – New Zealand, Southeast Asia and North Africa – ranging from study and permit applications through to drilling, asset deals and corporate acquisitions,” said chief executive Andrew Knight.

“Kupe and Tui are expected to provide ongoing cash flows and we intend to invest a sensible portion of those cash flows in new investments in order to grow the business and provide long-term value for our shareholders,” he said.

The shares were unchanged at 73.5 cents and have gained about 5 percent this year.

(BusinessDesk)

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