NZ Oil & Gas posts first-half loss of $99 mln on Pike charge

NZ Oil & Gas posts first-half loss of $99 mln on Pike River impairment

By Jonathan Underhill

Feb. 23 (BusinessDesk) - New Zealand Oil & Gas Ltd. posted a first-half loss after impairments from the failed Pike River Coal Ltd. overshadowed growth in overall revenue. The shares fell 1.2%.

The net loss was $99 million in the six months ended Dec. 31, from a loss of $6.5 million a year earlier, the Wellington-based company said in a statement. Sales rose 7% to $40.5 million. Pike-related impairments amounted to $98.6 million and unrealised after tax foreign exchange losses were $5.2 million, it said.

The deadly explosions that pushed Pike into receivership left NZOG as a secured creditor for US$28.9 million of convertible bonds and a $12 million funding line extended in November, which it expects to recover. It is also an unsecured creditor for a separate $13 million of short-term funding and the impairments relate to that and $77 million for its 29.4% shareholding and options.

While the Pike disaster has dominated headlines, NZOG’s longer-term focus is finding offshore energy investments to make up for limited growth opportunities at home.

“New Zealand remains an attractive investment destination, but the number of available opportunities will always be limited,” the company said. “As a result we cannot be confident of meeting our growth objectives from New Zealand alone.”

The company began evaluating overseas opportunities in 2008 and is in the process of establishing a northern hemisphere presence, it said. Details will be announced once regulatory approvals are obtained.

NZOG had a total cash balance of $111.8 million at Dec. 31 and a net cash position of $48.8 million, it said today.

The company said the Kupe gas and oil field provided $27.4 million of revenue in the first half, making it NZOG’s largest single source of sales. Its share of production was 1.2 petajoules of gas, 5,800 tonnes of LPG; and almost 143,000 barrels of light oil, it said.

The Tui area oil fields provided $13.1 million of revenue, producing 1.36 million barrels of oil in the first half, of which NZOG’s share was 170,000 barrels.

NZOG won’t pay a first-half dividend. Its stock dropped 1 cent to 86 cents and has shed 45% in the past 12 months, with the biggest drop coming in the wake of Pike’s explosions.

(BusinessDesk)

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