New Zealand Oil & Gas Narrows 1H Loss

Wellington based New Zealand Oil & Gas has reported a lower net loss for the six months that ended December 31, 2016 driven by reduced operational cost. The company incurred a loss of NZ$25.4mn ($18.1mn) compared with NZ$45.2mn in the same period last year.

The 1H accounts released March 1 do not include the profit on sale of the company’s interest in the Kupe gas field, which was sold for NZ$168mn, nor the disposal of its interest in the Tui oil field. Both transactions were completed effective January 1, 2017 and therefore the full-year financials will give a more appropriate picture of the 2016-17 financial position, NZOG said in a statement.

The company has managed to reduce the overheads in 1H by NZ$2mn compared with the previous year, despite the inclusion of one-off costs for restructuring at Cue and NZ$0.5mn in costs from the sale of Kupe. Exploration expenses in the six months were NZ$4mn, down from NZ$9.4mn in the previous year. Capital spending on oil and gas assets was NZ$3mn, down from NZ$7.7mn.

CEO Andrew Jefferies said NZOG is entering a new stage of its life following the sale of its two major assets.

“We achieved incremental value for our legacy assets and now have a lower cost structure in the business including a reduced executive team and lower corporate rental overhead. Growth will be achieved by deploying our remaining cash to acquire quality assets at a scale, risk-profile and price that suit our size. In addition, in New Zealand we are participating in two potentially transformational deepwater prospects off the South Island, including the Barque prospect that we estimate could hold 11 trillion ft³ of gas and 1.5bn barrels of oil or gas condensate liquid. This prospect alone could transform the national economy if it is successfully drilled with partners to help share drilling costs,” Jefferies said.

Shardul Sharma