Costs higher than forecast provided a disappointing note to
the New Zealand Oil & Gas financial report for the year
ended June, Forsyth Barr broker Peter Young said yesterday.
Revenue, operating earnings (including exploration costs) and
normalised profit fell as the Tui oil field entered its
decline phase and because the Kupe gas and oil field was shut
down for part of the year for planned maintenance.
NZOG reported an operating profit of $58.8 million for the
period, down 17% on the $70.5 million reported in the
previous corresponding period.
Total revenue fell 14.8% to $99 million but operating costs
fell only 8.4%. The company wrote off $15.1 million of
exploration costs and $22.4 million of depreciation and
amortisation to report earnings before interest and tax of
$21.3 million, down nearly 47% on the pcp.
The reported profit was up 30.5% to $25.9 million because the
company did not have to account for equity earnings or losses
and the normalised profit, after abnormals, was down 52% at
A fully-imputed final dividend of 3 cents per share would be
paid, taking the total dividend to 6cps.
The company said it was using its cash to fund more
exploration and continue to pay a dividend.
Mr Young said NZOG did not provide any formal outlook
comments. However, it was now drilling a second well in
Indonesia and had reported oil shows.
''This was expected given the nature of the well being
drilled but the question is whether flow rates are or can be
improved to commercial levels.''
Also, NZOG had three New Zealand wells to drill in coming
months. The most exciting of those was Matuku, which would
begin drilling in late September, he said.
Forsyth Barr was forecasting a flat operating profit for the