AWE burns A$113m on unsuccessful exploration

Tuesday 24th August 2010

Tui oilfield participant AWE expressed disappointment today about the lack of success in its high profile season of exploration in New Zealand Australia, and Indonesia.

The shares fell 3.7% to A$1.58 on the Australian Stock Exchange, after announcement of a statutory net loss after tax of A$28.9 million for the year to June 30. ASX-listed AWE shares have fallen 39% in the last six months, as a string of unsuccessful, capital-intensive exploration announcements came through.

The most recent, falling outside the last financial year, was the Tuatara-1 well off D’Urville Island, and two unsuccessful side-well plays in the highly prospective Tui licence, already a producing oil and gas field, also came up short, although one may be useful in future as a gas injection reservoir.

Exploration write-offs of A$113.1 million are “largely related to unsuccessful drilling activity in New Zealand, Australia and Indonesia,” the company said in a statement to the ASX. A significant abnormal item relates predominantly to asset impairments ($23.4 million in the onshore Perth Basin). After adjustment for abnormal items, the underlying net loss after tax was $21.1 million.

The year to June 2010 had been disappointing, said outgoing chairman Bruce McKay.

“Whilst revenues and cashflows remained solid, the high-profile exploration program did not produce the anticipated results.”

While AWE’s total 2011 production is expected to be higher than 2010, the Tui oilfield is on a production wind-down after three years of high production.

Also announced were the appointments of Bruce Phillips as the new chairman and Nick Jukes as a non-executive director.

Businesswire.co.nz

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