NZ Oil & Gas back to profit after Pike River

BUSINESSDESK: New Zealand Oil & Gas posted a full-year profit of $19.9 million as it puts behind it the disastrous foray into the Pike River coal project that saw it plunge to a $76.5 million loss the previous year.

The result reflects a comparatively simple year in cash-flow terms, with $116.4 million received from its share of revenue from Kupe ($74.3 million) and Tui ($42 million), the two producing oil fields in which it holds interests.

While revenue was slightly below forecasts from brokerage Forsyth Barr, earnings before interest and tax of $63.6 million were just ahead of the forecast of $64.7 million. Shares of NZOG fell 0.6% when the NZX opened this morning, trading at 83.5 cents.

NZOG continues to pursue opportunities in Indonesia and Tunisia, although the first prospect of oil production in either territory is in 2014, if a decision later this year gives the go-ahead to drilling in the Tunisian Cosmos licence.

Directors declared a 6 cents per share fully imputed dividend, payable September 28, with an ex-dividend date of September 14. Shareholders can opt to take their dividends as shares under a dividend reinvestment plan.

Total cash on hand at June 30 was $209.2 million, with net cash sitting at $162.4 million.

"NZOG continues to maintain a strong balance sheet to fund existing and future exploration opportunities," the company says.

"The fundamentals of NZOG's business remain strong and the company is keenly focused on delivering results and significantly enhancing value."

On top of the $25 million it lent to Pike River Coal the previous year, the accounts show NZOG contributed a further $6.8 million to assist the receivers with the sales process for the mine, which was bought by Solid Energy.

The bodies of 29 miners who died in explosions in the mine in November 2010 remain in the mine.

Solid Energy has paid $7.5 million for the mine, as is, and has agreed to pay a further $25 million in instalments should it ever return to production.

NZOG held a 29% stake in the venture and wrote off a total of 98.8 million in losses and provisioning relating to its failure.