Explorer New Zealand Oil & Gas starts its new financial year with a $98million war chest and Government assurances its exploration permits off the Otago and Southland coasts will not be hindered, should a discovery be made.
Revenue for its year to June was down 3.5% at $35.8million, while after-tax profit was $4.8million, compared with a loss last year of $32.7million, without recognition of one-offs.
Because New Zealand Oil & Gas (NZOG) included a one-off gain last year on the sale of its 15% interest in Kupe gas production, it declared an after-tax profit of $52.6million.
Kupe was sold for $168million, making a $96million gain for NZOG.
NZOG chief executive Andrew Jefferies said now that the company was backed by the global capability of its major shareholder, OG Oil & Gas (Singapore) Pte Ltd, and $98million in cash, NZOG had entered ``an exciting new growth phase''.
This quarter, Mr Jefferies said NZOG would be drilling onshore at Kohatukai in Taranaki.
In an effort to avoid costly litigation, the Labour-led Government is allowing existing oil and gas exploration permits to go unchallenged, but has shut down the offer of any new offshore permits, and restricted any new onshore permitting to Taranaki.
NZOG has for the past two and a-half years been looking for joint-venture partners for its southern permits: Clipper, off the coast of Oamaru; and Toroa, south of Dunedin.
``We see natural gas assets in many markets replacing higher-carbon fuel sources as the world undergoes a decades-long energy transformation,'' he said.
Clipper and Toroa are considered gas targets, with only minor shows of light-oil condensate.
Mr Jefferies said NZOG was continuing to market its ``two transformational prospects'' off the South Island's east coast.
During the year NZOG had published a study which showed a discovery would have ``compelling commercial potential'', in either of the southern prospects.
``The Government has provided written assurance that our existing exploration rights [for Clipper and Toroa] will be preserved and, in the event of a discovery, development would be assessed under existing rules,'' he said.
NZOG shares are down almost 16% on a year ago, but traded up slightly yesterday at 58c. Mr Jefferies said as NZOG was embarking on a growth strategy, there would be no dividend this year.
NZOG's revenue was from Kupe production of $9.2million and subsidiary Cue Energy's production of $26.6million, which Mr Jefferies said was covering NZOG's outgoings.
Last December NZOG bought a 4% interest in the Kupe gas and oil fields and production station from Mitsui E&P Australia for $35million.
``Our investment in the producing Kupe gas field offshore Taranaki is small, but it is a reliable earner sufficient to cover our corporate overheads,'' he said.
NZOG's permit for the large Ironbark prospect in Western Australia had been officially extended and work was ongoing to progress towards test drilling, Mr Jefferies said.
NZOG is also planning drilling at two Indonesian targets during the year.
