New Zealand Oil & Gas is pressing ahead with drilling exploration wells offshore Taranaki over this summer, despite taking charges of $98.8 million for its investment in the failed Pike River Coal mine and reporting a net loss for the year to June 30 of $75.9 million.
The result is an improvement on the half-year reported loss of $99 million, and reflects profitable post-tax trading of $23.1 million in the second half of the year, as revenues flowed from the Tui and Kupe oil and gas fields.
Managing director David Salisbury said the company was "very disappointed" with the company's current share price, which closed yesterday at 62 cents, saying that without the deadly explosions and subsequent receivership at Pike River, the company would have reported "normalised" net profit for the year of $30.6 million.
NZOG also suffered when new estimates of remaining reserves in the Tui oil field were halved, although further wells are being assessed and may produce additional volumes.
The result was earned on a 7 per cent increase in revenue for the year to $106.5 million, with a "gross profit from operating activities" of $52.7 million.
Unrealised after tax foreign exchange losses of $7.7 million also impacted the result.
A fully imputed annual dividend of 2 cents per ordinary share will be paid. The shares rose 1.6% to 63 cents on the NZX today.
The company said it is planning to drill its most advanced opportunity, in the southern offshore Taranaki basin area previously known as Kaupokonui, where estimates of mean prospective resources in excess of 200 million barrels of oil have been identified.
Australian listed resource company, Raisama, has joined the licence, as a 10 per cent partner and will meet 20 per cent of the cost, subject to a cap, of the first well, with other companies reviewing detailed data as NZOG looks for an additional joint venture partner, Salisbury said in a statement to the NZX.
The 'drill or drop' commitment deadline for the permit has been extended to January next year, but "NZOG is keen to drill this summer if a suitable rig can be secured and is currently assessing possible drilling rig options."
The company continues to advance new exploration interests in Sumatra, Indonesia, and in the Mediterranean Sea off the Tunisian coast.
As a 29 per cent shareholder in Pike River, NZOG has so far taken writedowns on the value of its shares at $77.1 million and a further $14.6 million in unsecured debt, but continues to expect repayment on its $51.5 million of secured debt to the company, plus interest, as the receivership realises mine assets and concludes insurance claims.