New Zealand Oil & Gas, which established Pike River Coal, has booked almost $99 million of losses related to the coal mine collapse last November which killed 29 men.
For its full-year to June result yesterday, NZOG posted an after-tax loss of $75.9 million, compared with a $3.9 million loss the year before. Without the losses attributed to Pike River and foreign exchange, NZOG's normalised profit would have been $30.6 million in the black.
Within its total abnormal costs for the year of $106.5 million, the Pike River-related costs of $98.8 million were split into writing off its 29% equity stake at $77.1 million, bond losses of $6.4 million, unsecured debt and interest of $14.6 million and a loss of coal option worth $700,000, with foreign exchange losses making up the balance of $7.7 million abnormals.
"The bottom line was severely impacted by the tragic events at the Pike River Coal mine. The accounts include Pike River Coal related provisions and losses of $98.8 million," the company said in a statement yesterday.
Shares in NZOG were up 1.6% at 63c after the announcement.
Good revenue has been maintained elsewhere by NZOG, totalling $106.5 million compared with $99.4 million last year, with its stake in the Kupe gas and oil field delivering $66.3 million and the Tui oil field $40.14 million.
The company's total cash balance at June was the equivalent of $149.4 million and cash position $86.1 million.
Craigs Investment Partners broker Chris Timms said the result was "good" and largely in-line with expectations.
"It is good for them to know where they stand [financially after Pike River]. I suspect they have presented a worst-case scenario of the [Pike] costs," he said.
With the Pike River mine sales process and insurance claims still under way, NZOG had concluded it could "reasonably expect" to recover the secured $51.5 million debt, and no impairment had been taken against that.
However, recovery of the unsecured $14.6 million debt was possible but less certain, so an impairment had been made, as was an impairment for the book value of the shareholding of $77.1 million.
While it was unusual that about a third of the NZOG share price was valued in $86.1 million cash, Mr Timms noted NZOG's other new oil and gas prospects in New Zealand, and potentially Tunisia and Indonesia, meant the possibility of expensive drilling programmes in the future.
Forsyth Barr broker Peter Young said the result was "generally in line with expectations", but a little softer due to slightly higher operating costs.
"The big change from the previous year is the increase in operating costs due to the first full year of operations of Kupe." Revenue was up 8.8% compared with a year ago due to Kupe operating for a full year, but that was partially offset by Tui revenues declining as the field enters the tail of its forecast production," Mr Young said.
He said it was a "surprise" NZOG had decided to pay a 2c dividend, having indicated earlier it would not be paying a dividend.
"I read this as NZO making a strong statement that the underlying business operations remain strong, with Kupe and Tui being cash flow positive projects."
