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NZ Oil and Gas lifts FY profit on lack of impairments as oil output declines

Tuesday 27th August 2013

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New Zealand Oil & Gas posted a 31 percent gain in full-year profit as impairments against its Pike River loans a year earlier weren't repeated while its Kupe and Tui fields produced less oil.

Profit rose to $25.9 million, or 6.3 cents a share in the 12 months ended June 30, from $19.9 million, or 5 cents, a year earlier, the Wellington-based company said in a statement. Revenue fell 15 percent to $99.3 million. Profit beat First NZ Capital's forecast of $21.1 million.

Finance costs in the latest year were about $1.7 million, compared to $19.4 million a year earlier, when it recognised impairments to a loan to the failed Pike River mine.

At an operating level, the company's 15 percent owned Kupe field and 12.5 percent-owned Tui field produced 1 million barrels of oil equivalent at an average US$108.8 a barrel, down from 1.1 million barrels at US$114.8 a barrel a year earlier. Royalties paid to the government over the two fields fell to $9.4 million from $12 million.

Revenue from Kupe fell to $68.8 million from $74.3 million a year earlier, mainly reflecting a planned maintenance outage, while revenue from Tui fell to $30.4 million from $42 million as the field entered its natural decline phase. The company got a $5.6 million capital return from Pan Pacific Petroleum during the year.

During the year, the first well was drilled at the Kisaran Production Sharing Contract onshore Sumatra, Indonesia in what is the first overseas well for NZOG. In February, the company withdrew from its Cosmos concession in Tunisia, with $8.8 million expensed.

In New Zealand, the company is preparing to drill at Matuku, offshore Taranaki, next month, followed by Pateke and Oi, and Kaheru in early 2015.

The company had $158 million of cash at year end and no debt and says it will use the funds for exploration and to continue to pay dividends.

NZOG will pay a final dividend of 3 cents a share on Sept. 27 with a record date of Sept. 13, making 6 cents for the year, unchanged from 2012. The shares last traded at 84 cents and have dropped almost 2 percent in the past 12 months, while the NZX 50 Index has gained 25 percent.

The stock is rated a 'buy' based on the consensus of six analysts surveyed by Reuters, with a median price target of 99 cents.

BusinessDesk.co.nz

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