Pike River - we did the right thing, says NZOG

New Zealand Oil and Gas' revenue fell as the Tui oil field enters its decline phase and because the Kupe gas and oil field was shut down for part of the year.
New Zealand Oil and Gas' revenue fell as the Tui oil field enters its decline phase and because the Kupe gas and oil field was shut down for part of the year.

New Zealand Oil & Gas says it is satisfied it "stepped up and did the right thing" following the disaster at Pike River Coal despite pressure to contribute to the families of victims and survivors.

NZOG today announced normalised after-tax profits of $16.7 million and an after-tax profit of $25.9m. It is debt free with cash of $158 million and commentators have called on the company to use some of this to contribute to a $3.41 million court-ordered compensation package.

The company was a driving force in the creation of Pike and had a 31 per cent stake in the project at the time it exploded in November 2010.

NZOG chief executive Andrew Knight said the company was satisfied with its behaviour.

After the explosion NZOG put $25 million into Pike River Coal for tunnel recovery to fund salaries and wages for staff and small and unsecured creditors.

"We believe we did the right thing. No matter where we get to we'll always believe we've done the right thing following the explosion," Knight said.

In July, Judge Jane Farish awarded $110,000 to each of the 29 victims' families and as reparation to the two survivors but Pike River is in receivership with sufficient funds to pay $5000 to each family.

Knight said his company had received "a lot" of feedback since the ruling.

"Some people believe we should step up, some people say we absolutely believe we've done enough. There's other people who think we're not going to meet our obligations to New Zealand Oil & Gas," he said.

"We get quite a range of views on it - the one thing I can take away from it is I believe NZOG did the right thing in stepping up."

Knight said NZOG was satisfied based on "strong legal advice" it would not be exposed to class action if it did not contribute to the payout .

The company was still waiting for a written copy of the judge's sentencing notes.

"We have no rights because we're not a party but having said that we keep an active watch."

Normalised after tax profits have fallen to $16.7 million for the year to June 30, compared to $33.1 million the year before.

The Wellington-based explorer and oil field co-owner said however its net profit after tax for the year was $25.9 million, up 30 per cent from $19.9m last year due to abnormal items.

NZOG announced a fully imputed final dividend of 3 cents per share.

The company said strong cash flows through the year funded increasing exploration and dividend distributions.

Exploration and evaluation expenditure for the year was up strongly to $42.2 million, from $9.5 million the previous year, as the company looked to replace its producing Taranaki assets.

Revenue for the year was $99.3 million down from $116.4m last year as the Tui oil field enters its decline phase and because the Kupe gas and oil field was shut down for part of the year for a planned maintenance outage.

Earnings before interest, tax, depreciation and amortisation, and exploration expenses (EBITDAX) were NZ$67.8 million compared to $70.5m last year.

It said it repaid all $46.6 million of debt in the year.

The company's two producing assets, Kupe and Tui, delivered 1.0 million barrels of oil equivalent. The average price achieved over the year for oil and light oil was US$108.8 per barrel down from 1.1 million barrels which produced in 2012 at an average price of US$114.8 per barrel.

The Kupe field, in which NZ Oil & Gas holds a 15 per cent interest, produced revenue of $68.8 million for the company, down from $74.3 million the previous year, mainly due to planned maintenance outages.

The Tui field has entered its natural decline phase and earned NZ Oil & Gas NZ$30.4 million in the full year from its 12.5 per cent share compared to $42 million in 2012.

The company also received a capital return of $5.6 million from Pan Pacific Petroleum.

Drilling on the Kisaran project in onshore Sumatra, Indonesia started during the financial year.

Preparations have advanced for drilling in offshore Taranaki, at Matuku in September, then at Pateke and Oi (Tui) following Matuku, and at Kaheru in early 2015.

Interests in four new exploration permits were acquired offshore from Taranaki: Matuku, Takapou, and Taranga were acquired by farming in, and Waru in the Government's 2012 New Zealand Block Offer, where the company also picked up an onshore permit, Manaia. In offshore Canterbury New Zealand Oil & Gas farmed into the Clipper permit.

In February the company announced its intention to withdraw from its Cosmos concession in Tunisia resulting in $8.8 million being expensed over the year.

- NZ Herald

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