New Zealand Oil & Gas' half-year net profit has dipped but the company hopes significantly more exploration and a strong balance sheet will grow its future returns.
The listed Wellington-based company reported a net profit today of $4 million for the six months ended December 31, 2013.
This was down 48 per cent on the interim result a year earlier, though earnings before interest, tax, depreciation, amortisation and exploration expenses had risen 13 per cent, to $31.41m.
Revenue had also increased, by 7 per cent to $51.42m, because of a full period of production and sales following a maintenance shutdown at its Kupe field last year.
This was also boosted by the the doubling of its share of production from the Tui oil fields in Taranaki from 12.5 per cent to 27.5 per cent, which had cost the company $7.73m
Total production had increased by 600,000 barrels of oil equivalent.
The company said its operating performance for the first six months had been in line with expectations.
Spending on oil exploration and evaluation was up from $10.53m to $23.75m, as it looked to expand its portfolio and was involved in more exploration.
At December 31, 2013, the company had $164.21m in cash, and no debt, which it said would allow it to pursue three avenues to grow returns to shareholders.
These were building the portfolio, developing new prospects at existing sites, and ensuring existing assets were fully developed and completely explored.
In the 2013 block offer NZ Oil & Gas was awarded three permits, one in Taranaki and two in the Canterbury-Great South Basin.
Two permits in Taranaki were also surrendered but a consortium, in which the company had an interest, was awarded a production contract in Indonesia.
The company announced an interim dividend of 3 cents a share, to be paid April 4.
Shares in the company were unchanged from 78.5c shortly following the announcement.
- © Fairfax NZ News