Costs higher than forecast provided a disappointing note to the New Zealand Oil & Gas financial report for the year ended June, Forsyth Barr broker Peter Young said yesterday.
Revenue, operating earnings (including exploration costs) and normalised profit fell as the Tui oil field entered its decline phase and because the Kupe gas and oil field was shut down for part of the year for planned maintenance.
NZOG reported an operating profit of $58.8 million for the period, down 17% on the $70.5 million reported in the previous corresponding period.
Total revenue fell 14.8% to $99 million but operating costs fell only 8.4%. The company wrote off $15.1 million of exploration costs and $22.4 million of depreciation and amortisation to report earnings before interest and tax of $21.3 million, down nearly 47% on the pcp.
The reported profit was up 30.5% to $25.9 million because the company did not have to account for equity earnings or losses and the normalised profit, after abnormals, was down 52% at $17.5 million.
A fully-imputed final dividend of 3 cents per share would be paid, taking the total dividend to 6cps.
The company said it was using its cash to fund more exploration and continue to pay a dividend.
Mr Young said NZOG did not provide any formal outlook comments. However, it was now drilling a second well in Indonesia and had reported oil shows.
''This was expected given the nature of the well being drilled but the question is whether flow rates are or can be improved to commercial levels.''
Also, NZOG had three New Zealand wells to drill in coming months. The most exciting of those was Matuku, which would begin drilling in late September, he said.
Forsyth Barr was forecasting a flat operating profit for the 2014 year.
