Currency costs hit Cue profit

23:12, Aug 14 2013

Cue Energy has reported an 18 per cent drop in interim earnings as stronger Indonesian production was sapped by higher amortisation and other costs, as well as a reversal of foreign exchange gains.

The Australian headquartered energy and exploration firm's net profit for the six months ending December 31 came in at A$3.2 million (NZ$3.96m), down from A$3.9m seen in the same period a year ago.

The drop in profit came despite a 42 per cent jump in production income to A$28.4m and the firm receiving an average of A$108 (US$110) per barrel of oil.

The slip was largely due to amortisation expenses and general costs doubling in the period to A$8.5m and A$5.5m respectively, as well as booking a foreign exchange loss of A$496,000 - a reversal from the A$2.7m gain in the previous period.

The bulk of the firm's earnings came from the Indonesian operations, with revenues jumping 264 per cent to A$16.4m

That made up for declining revenues from Cue's New Zealand, Australia and Papua New Guinea operations, which fell 21 per cent, 97 per cent, and 28 per cent respectively.

In statements filed with the NZX, director Steven Koroknay said the firm was working to maximise existing production in the second half of the year and develop provable energy reserves.

He said the firm was also pushing ahead with drilling programmes, with the Kan Tan IV rig expected to arrive in the South Pacific towards the end of 2013.

The strategic plan is supported by a strong balance sheet, with A$44m cash on hand, no debt on its books and generated net cash flows of $17.4m in the period.

No dividend was declared.