NZOG turns profit, abandons project

Last updated 16:02 01/03/2013

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Wellington-based New Zealand Oil & Gas made an after-tax profit of $7.7 million for the half year to the end of December, up from $1.7m in the corresponding period.

The company also announced it would not go ahead with a potential development in Tunisia, called Cosmos South.

NZOG shareholders will be paid an interim dividend of 3 cents a share on April 5.

NZOG said it asked for a trading halt on its shares yesterday because NZOG recognised that decisions relating to expensing its Cosmos assets in Tunisia produced a result materially different to expectations.

The company has fully expensed its investment in the Cosmos South development plan in Tunisia.

"NZOG's assessment of the current development plan for the project does not meet the company's investment criteria and on that basis NZOG would not proceed," the company said.

The company's accounts showed $6.4m in exploration and evaluation costs expensed in the six months, compared with less than $600,000 in the same period a year before.

The company's two producing assets, the Kupe gas field and Tui oil field off Taranaki in New Zealand, contributed net operating cashflows of $25.2m for the six months, compared to net operating cashflows of $26.5m in the prior year.

The $6.0m increase in net profit after tax was largely a result of changes in two net finance cost items.

The prior period included impairment losses relating to Pike River Coal while the strengthening New Zealand dollar resulted in a fall in the value money held in US currency.

Earnings before interest, tax, depreciation, amortisation and exploration (EBITDAX) were $27.9m ($33.0m in the comparable six months to December 2011.)

New Zealand Oil & Gas ended the period with a net cash position at 31 December of $171m.

The trading halt on NZOG shares has been lifted. Before the trading halt, the shares traded at 93c.

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