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NZOG to pay extra dividend as annual profit soars

Friday 29th August 2008

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New Zealand Oil & Gas's full-year profit soared as production from the Tui oil field allowed it to benefit from rising global crude oil prices. As a result, the company will pay an extra dividend.

Profit rose to NZ$97 million, or 24.1 cents a share in the year ended June 30, from NZ$6.76 million, or 1.9 cents a year earlier, the company said in a statement. Revenue rose more than 5,000% to NZ$234 million.

The Tui field, off the Taranaki coast, began production in July 2007 and within 11 months reserves had been upgraded by 80% and output was 42% ahead of forecast. NZOG, which owns a 12.5% stake, had recouped project costs by December last year. NZOG also stands to benefit from the start of production at the Kupe Project in 2009 and is seeking new investments in reserves, using its mounting cash reserves.

"The expansion of Tui reserves and higher rates of production, together with Kupe coming on stream in mid-2009 provide a very sound outlook for continued profitability," chairman Tony Radford said. "We have been systematically screening opportunities, both in New Zealand and overseas.

The company will pay a fully imputed extra dividend of five cents a share.

Today the shares fell 0.6% to NZ$1.61. In the past year they've climbed 55% while the NZX 50 Index fell 20%.

NZOG owns about 30% of Pike River Coal, through shares, options and convertible notes, an investment that has surged in value to NZ$200 million at June 30 from a carrying value of NZ$66 million.

Crude oil for October delivery fell 2.2% to $115.59 a barrel on the New York Mercantile Exchange yesterday. Prices have gained 61 percent from a year ago.

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

By Jonathan Underhill

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