NZOG annual revenue soars on output from Tui

Thursday 31st July 2008

New Zealand Oil & Gas, the explorer whose stock jumped 33% this year, said annual revenue soared on its share of production from the Tui oil field.

Revenue rose to NZ$234.6 million in the 12 months ended June 30 from NZ$4.2 million a year earlier, the company said in a statement. Year-earlier revenue was restated for IFRS.

Production from Tui began on July 30 last year, with some 15.2 million barrels of oil extracted to date. Proven and provable reserves were increased to 50.1 million barrels last month. The field's output is typically sold against the Tapis benchmark price, which reached a record US$150 a barrel in June and was recently at US$135.

"NZOG is on a very sound financial footing and we are focused on maximizing value from out existing assets, as well as identifying attractive new investments," chief executive David Salisbury said.

Shareholders rallied to buy more stock last month, with 91.8% of June 2008 options taken up at NZ$1.50 apiece, raising NZ$190.8 million. The stock rose 5% to NZ$1.61 today.

The capital raising and Tui revenue have bolstered NZOG's cash balance to about NZ$280 million. The company also got a gain from its stake in Pike River Coal Ltd.

The company is looking beyond New Zealand for investment opportunities because those available locally "are too few to satisfy our growth targets," Salisbury said.

AWE is the operator of Tui and largest participant, with 42.5%. Mitsui E & P Australia Pty has 35% and Pan Pacific Petroleum NL has 10%.

By Jonathan Underhill

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