The semi-submersible rig Kan Tan IV in Taranaki for New
Zealand Oil & Gas. Photo supplied.
An exploration boost has undercut profit for debt-free
New Zealand Oil & Gas, but the company retains a healthy
$164.2 million war chest of cash.
As part of its expanding portfolio, both the Great South
Basin and Canterbury Basin of the South Island east coast can
expect greater scrutiny from New Zealand Oil & Gas (NZOG)
during the next three years.
For the six months to December, revenue was up 7% from $47.8
million to $51.4 million, but exploration costs rose from
$10.52 million a year ago to $23.74 million; with after-tax
profit down from $7.66 million to $4 million.
The shares fell 0.6% to 78c following the announcement,
having declined 16% in the past 12 months. A 3c unimputed
interim dividend was declared.
Total production increased 20%, from 500,000 barrels of oil
equivalents to 600,000.
The purchase of a greater production share in the Tui oil
fields in Taranaki, costing $7.73 million, led to a slight
boost in sales revenue.
Craigs Investment Partners broker Peter McIntyre said the
result was ''reasonable, and as expected'', but the decline
in after-tax profit hid the 7% gain in revenue gain and 108%
''NZOG have been impacted by a foreign exchange loss [$2.4
million] and more exploration costs, but that has to be
expected from time to time,'' he said.
''Investors can be heartened by the cash that remains on its
balance sheet,'' Mr Mcintyre said of the $164.2 million cash
Forsyth Barr broker Andrew Rooney said the result was ''as
expected'', saying the exploration costs written-off were
$12.6 million, with most of the costs relating to the Matuku
test drill, which was dry.
Compared to the same period a year ago, the result was
stronger to the earnings before interest, tax, depreciation
and explorations costs, mainly due to the 15% purchase of Tui
during the trading period, he said.
''However, the higher exploration write-offs meant the
reported net profit after tax was worse,'' Mr Rooney said.
The company said its spending on exploration and evaluation
was up significantly to $23.747 million as it expanded its
portfolio and was involved in more exploration activity,
compared to a year ago.
• NZOG was awarded three new offshore permits during the 2013
block offer, by Government permitting agency New Zealand
Petroleum & Minerals.
NZOG has the Vulcan permit off Taranaki, and Toroa in the
Great South Basin/Canterbury Basin where NZOG has partnered
with Woodside Petroleum, a '' a significant step in the
company's strategy of being the partner of choice for
exploration in New Zealand'', NZOG said.
Also, in the Great South Basin/Canterbury Basin area, NZOG
was awarded the Galleon permit, next to its existing Clipper