NZ Oil and Gas 1H profit falls 47 percent as exploration costs almost double

Wednesday 19th February 2014

New Zealand Oil & Gas, which has interests in the Tui and Kupe fields, reported 47 percent decline in first half profits, as revenue growth was offset by a near doubling of exploration and evaluation costs.

Net profit fell to $4 million in the six months ended Dec. 31 from $7.6 million a year earlier, the company said in a statement. Exploration and evaluation costs surged to $12.6 million in the period from $6.5 million a year earlier as the company ramped up its activity, weighing on the bottom line.

The company didn't provide any specific forward guidance.

NZOG's revenue rose 7 percent to $51 million in the period, lagging a 16 percent increase in operating costs to about $25 million and resulting in a gross profit of $26.7 million, little changed from $26.6 million from a year earlier.

Earlier this year the oil and gas explorer announced it had found no significant gas or oil shows in its Matuku well near Taranaki. The company continues to build its portfolio, with three new offshore exploration permits awarded last year. It also has a 36 percent stake in a three-year exploration of onshore south of Sumatra, Indonesia.

The Wellington-based company's Tui field, New Zealand's first stand-alone offshore oil development, declined 19 percent to $13 million in total revenue and other income, while the longer-running gas and light/oil condensate Kupe field increased 21 percent to $38 million.

Net tangible assets per share declined a cent to 84 cents. The company said it will pay shareholders an unimputed interim dividend of 3 cents per share April 4.

The shares fell 0.6 percent to 78 cents, and have declined 16 percent in the past 12 months.

BusinessDesk.co.nz

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