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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% cashflow increase.
''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 on hand.
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 interest.